Amazons New Plan to Connect Mobile Payments, Biometrics Sparks Wariness at KBW

The “Back to the Future” series of films gave us several exciting glimpses of what was at the time future technology. While some of it never quite got off the ground—like hoverboards—some of it became a very real proposition. For mobile payments buffs, the notion of “thumbing” some cash for the clock tower caught all our interest, and there’s a new report saying Amazon is looking to do something similar. Our friends at Keefe, Bruyette & Woods (KBW) dropped commentary our way about the topic, and the response is a little baffled.

The hope, KBW projects, is that the notion will catch on and go beyond Amazon, with Amazon already talking the idea over with a range of credit card issuers to work with terminals that carry out a palm reading to identify a customer and his or her accompanying payment details. This could move into other venues, like quick service restaurants (QSRs) and similar locations.

Since this is still a development in its early stages, KBW notes, there are a lot of unknowns that come along with the development. For instance, just what biometric indicators will be used to authenticate customer payments, how Amazon will share this technology out, and how the system will be able to detect fraudulent transactions.

Additionally, two major factors that KBW cites in determining how far it will advance are what the costs will be to the end user—if Amazon is basically going to set itself up as the new payment processor, that might be worthwhile to the businesses who put this program in place—and just how useful customers will actually find this technology.

That in turn depends on how it works. We’ve known for some time that fingerprints can be an effective security tool; anyone with a model of Android or iOS phone from within the last two to three years can tell you that much. Connecting them to a mobile payments tool isn’t without its sense. The biggest problem here may be that Amazon is targeting a market that often doesn’t have a lot of extra cash to work with on renovations and the like, so persuading low-margin QSR business to buy in may be a challenge even if it does work.

Still, Amazon has a noteworthy plan here, and seeing just how far it goes should be exciting in its own right.