EMV PCI ATM Industry essential guide

It sounds like a scene out of Star Trek: To gain access to bank accounts, vaults and other secure facilities, people have their eyes, faces, fingers and palms scanned.

Envision Capt. Kirk putting his hand up to enter a chamber on the Enterprise and you'll have a pretty good idea of how biometrics is now being used in a growing number of financial institutions and businesses throughout the world.

Biometrics is just what it sounds like — a bodily measurement. The most widely used measurements include those of fingerprints, irises, faces and palms; other measurements, like determining how quickly or in what fashion a person types his PIN on a keypad, could also be used.

Fingerprint scanning is gaining the most interest from corporations, said Randy Vanderhoof, executive director of the Smart Card Alliance, a group formed in 1992 to address technological needs and the use of smart cards by FIs, government institutions and other entities. That's because it's the least expensive biometrics technology, it's reliable and consumers are becoming more comfortable with it.

It's all in a print

When the fingerprint is scanned, a template is created, providing a measurement for each ridge and groove in the finger. The template information is then translated through a reader that compares the information from the finger that is scanned when a person tries to access an account at an ATM, for instance.

"Using the fingerprint is cheaper because integrating the fingerprint into the reading device is easier than with any other (form of) biometrics," Vanderhoof said. "You only need a template to read an individual's fingerprint. And to get a template, you only need a person's fingertip."

The fingertip generates a unique numerical calculation that can be matched to a reader device, smart card or back-end system, Vanderhoof said.

A fingerprint reader, with just the basic capabilities, costs between $10 and $50. But comparing the prices of differing biometrics techniques is difficult, said Mark Grossi, NCR's chief technology officer.

Many factors play into the cost. "The actual technology on the machine is a whole host of applications. There's a whole system behind this with an infrastructure to support it," Grossi said.

 

The move to Microsoft Windows-based ATMs will make integrating such technology into ATMs easier and cheaper, he said.

 

Fingerprint technology is the oldest and "most mature" method of biometrics, said Jim Block, director of global advance technology for Diebold Inc. Although iris scanning is the most accurate, fingerprint identification comes in at a close second, he said, and is much more reliable than facial scans — which can be negatively impacted by the presence of facial hair or a user's proximity to an ATM.

 

"The iris scan is invasive," Vanderhoof said. "People have an aversion to putting their eye up to a reading device and having a light shine into it. And the technology is much more complicated. The lighting conditions have to be set properly, for instance, and therefore the supportability and the cost of installing the technology are more expensive."

Hand geometry and facial scanning, he continued, aren't of as much interest to financial institutions because they aren't as reliable as iris and fingerprint identification .

More than one way to read a print

There are basically three different types of fingerprint biometrics: minutia-based, which measures the space and difference between the ridges and swirls on the finger; pattern-based, which is like a photograph of the fingerprint's pattern; and full-image-based, which is similar to a picture of the entire fingerprint.

The technology isn't new.

Ahead of its time

Some companies quick to jump on the biometrics bandwagon soon learned that the technology was too expensive and impractical. The use of biometrics at the ATM created challenges, Diebold's Block said.

In the mid- to late ‘90s, Diebold piloted two projects that used biometrics at the ATM. One project, in Houston, Texas, used iris scanning. The other, in South Africa, used fingerprint scanning.

Neither program still exists, but the lessons learned will help shape the way biometrics is used in the new millennium, Block said.

The South African pilot, which launched in 1996 at Standard Bank in Johannesburg, was the first live installation of biometrics on an ATM. The project was successful "to a point," Block said. "(It) ran pretty long, but they ran into the problem of knowing how to make it bigger."

Basically, he added, Standard Bank didn't have an infrastructure in place to take the project to the next level, allowing expanded usage.

In Houston, Bank United launched the first iris-scan project used at an ATM; but when Washington Mutual Inc. acquired the bank in 2001, the project died.

Inadequate infrastructure

Within a limited or controlled group, Block said, the use of biometrics identification is possible at ATMs. The information can be stored at a bank branch, for instance, if the user-group is limited. But there's no easy or cost-effective way to control the ATM environment.

"ATMS are so prevalent, and you have so many people using ATMs, it's hard to use biometrics as a way to replace the PIN at an ATM on the global market," Block said.

FIs have to have a system in place that will identify a person when he uses the ATM, whether he's using an ATM in the Unites States or overseas.

"It's that data, which we call a PIN today, that has to travel from where you are to where you're going," he added. "It has be collected and kept somewhere. It's not a technology-related issue; it's an infrastructure issue."

Is big brother watching?

Another issue is the public's resistance to providing biometrics information, especially in the United States.

"People want to know where this data is being stored and who has access to it," Block said. "In a more closed environment, like gaining access to a specific room in a corporation, you can have very specific data for very specific people, and you can control where that data is kept and who has access to it."

That would be impossible to do for use at ATMs worldwide, he added.

For that reason, Block said, Diebold is not using biometrics on any of its ATMs. It does use the technology on some of its other products like PassVault, a product introduced in 2000 that reads palms to allow admittance into FIs' vaults.

South Carolina Federal Credit Union is using PassVault in its new South Hampton Remote Teller System branch, which opened in December. The new branch, the only one like it in the state, is a technology center where members use not only PassVault but Diebold's Remote Teller station and Adque Communications Screens, plasma televisions where customers are fed information about the credit union. (See related story RemoteTeller beats ATM in personality contest)

Scott Woods, SCFCU's CEO, said PassVault has been successful among the credit union's members. The branch's manager told Woods that "the members love the PassVault because of its convenience. She has had all positive feedback on it, nothing negative."

Woods said the new branch uses between three and four fewer employers than its traditional branches. He said the use of PassVault has contributed to the savings. But he declined to give any expected savings percentage.

The credit union expects to open a second technology branch next month.

A better bean counter?

NCR Corp. late last year rolled out a biometrics project in Colombia, South America, that uses fingerprint scanning at Bancafe Bank ATMs.

NCR's Grossi said the project will allow the bank's 2.5 million customers to access their funds by using fingerprints rather than PINs. The project is focused on, albeit not limited to, a controlled group of users, which Grossi said makes the project practical for Bancafe.

"This particular project was focused at a segment of guys that grow coffee beans," Grossi explained. "They bring beans from the outskirts of town to the merchant and the merchant credits them for the beans."

Because the farmers are credited for their goods, the process eliminates the need for them to carry cash. Grossi said that was a primary consideration of Bancafe's, since it can be dangerous for farmers to carry large amounts of cash.

In Colombia, the farmers are accustomed to using and providing their fingerprints for identification.

"They use thumbprints and I.D. numbers at the ATM to access their funds now, and since the I.D. cards they carry around in Colombia have that same information, they're comfortable with it. They're used to providing a thumbprint. It's like our Social Security card."

Because of the market's comfort level, Grossi said, the project was attractive to NCR. The use of fingerprint scanning is expected to save Bancafe money, since it will reduce the amount the bank would have spent to issue new cards for all of its customers.

So why is there a renewed interest in biometrics, not just at ATMs but in all types of products?

"There are a number of reasons for that," Block said. "In my opinion, there's been a resurgence because now we're learning how to make the use of biometrics as convenient as using a PIN at the ATM."

The main reason for the attention, however, is that consumers are becoming more comfortable with the idea of biometrics — even in privacy-conscious areas like the United States.

Although Block sees usage of biometrics taking off faster elsewhere in the world, he said Americans are beginning to catch on. After 9/11, he said, homeland security became a national concern. Because of that, the use of biometrics is becoming more accepted at sites like airports — which could mean it will begin to catch on at ATMs as well.

Grossi agrees. The use of biometrics at ATMs is generating interest in Europe, where FIs face a growing card fraud problem. The trend will continue, he expects, as smart cards become more prevalent in the UK and Europe.

Could smart cards be the answer?

Grossi, Block and Vanderhoof said smart cards, because they can hold more information than magnetic-stripes on ATM/debit cards, could be used to store biometrics data. That, all agree, would help eliminate infrastructure issues. Consumers would not have to worry about where their biometrics data is saved; they would carry the information with them and compare it to the information produced when they scan their fingers or irises.

Be sure to read Back to the future, Part II, Feb. 4. ATMmarketplace will explore the use of smart cards for biometrics data.

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