„Subiektywnie o finansach” in English: Wroclaw’s fintech launches a system that allows you to pay by… scanning the iris of your eye! Is it revolution in the payment industry?

Wrocław-based fintech PayEye launches a system that allows you to pay for your purchases… with your eye. More specifically, using technology to identify a human being based the unique iris of their eye. I had the opportunity to test this absolutely amazing innovation on myself: I registered a PayEye code, a digitally coded image of my iris, fed a PayEye purse and went out for sushi. No wallet, no smartphone, no smart watch. Impressions? Will all of us be paying this way in a few years’ time? It’s time to biometrics in payments?

Biometrics is slowly beginning to reach our wallets. First, we started to log in to banks using smartphones with the ‘touch ID’ technology, i.e. by scanning our fingerprints. Already a few years ago Bank Pekao enabled the approval of payment orders in the same way (but only for lower amounts), but this peculiarity has not yet become popular in the banking industry.

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There are attempts to identify clients calling the call center through voice recognition (this option is offered by Santander Bank) and to confirm the identity based on the client’s typing style (this novelty is tested by mBank). Some time ago, PKO BP funded a research on customer identification based on their silhouette and facial features, but the program was closed and no results emerged in the public eye.

The biometric revolution is therefore still ahead of us, but one of the most important steps on this path has just been taken by the Wroclaw-based PayEye company, which is the first in Poland and Europe to introduce a payment system based on the client’s iris recognition.

New way to biometrics payments. Paying with your eye. Cool, but is paying with a smartphone, a watch, a wristband so bad?

The very idea of confirming identity this way is nothing new – the iris or retina scanning is used in access control systems in modern office buildings. This technology has been so expensive until now that no thought was given to using it for payments at all. Some time ago I wrote about a restaurant where one could pay by eye, but there – as far as I know – neither the iris nor the retina were scanned.

The PayEye payment method involves looking at a special flat-screen payment device equipped with a sufficiently sensitive camera. Nothing is waved over a reader, no PIN is given, just biometric identification.

At first glance, fantastic! For the first time, you are the “money”, you don’t have to carry any items on you to pay for purchases in the store.  But after a moment, a question comes to mind – perhaps it is form triumphing over substance? Paying with a smartphone (using Apple Pay or Google Pay), a contactless card, or a smart watch or wristband (and soon probably smart glasses, which I’ve also already laid my hands on) seems convenient and undemanding enough not to bother with further improvements. And smart jewellery proves that paying can also be beautiful.

I asked Krystian Kulczycki, President of PayEye and one of the shareholders of the company that put money into this project (the shareholders are private individuals, and they do not want to talk to the media about the money invested so far). Kulczycki is an experienced consumer finance manager: he was previously on the board of Euro Bank (recently acquired by Bank Millennium) and Santander Consumer Bank.

‘It is not our goal to replace by biometrics any of the existing payment methods. We simply create a convenient alternative. Everyone happens to leave home without a wallet. Sometimes we can’t or don’t want to take the smartphone out of our pocket. Paying by eye is quick and undemanding. And besides, our system can be used not only for shopping transactions but also, for instance, to confirm identity when dealing with authorities, or, in the future, to sign documents with one’s eye.’

How much does it cost to pay by eye

For any new form of payment, the main question is the cost of additional infrastructure and modification of existing systems. How about PayEye? As I have already mentioned, a merchant who wants to offer this form of payment needs a special terminal with a camera to “read” the iris. Why can’t you use your smartphone? Cameras in smartphones do not have the ability to focus the image in the way required for iris scanning.

The license for access to the PayEye payment system together with the device subscription is to be offered for PLN 99 per month (there will be discounts, read on). It can be connected directly to the store’s accounting and cash register system or only to the payment system (then the transaction has to be entered in the cash register at the same time). Once a day, the system generates a report and the next day the money is in the merchant’s account.

Kulczycki says that he hopes to turn this way of paying into a fad because it is so innovative that it can create a WOW effect among customers. The merchants who decide to introduce it in stores will be able to count on a free promotional campaign financed by PayEye and to have part or nearly all of their monthly subscription fee cancelled if they attract new users to the system.

The system developed by PayEye can work independent of the existing payment vendors at stores (i.e. settlement agents such as FirstData, eService, etc.) but the company is open to cooperation.

Initially, the system will be offered to merchants in Wrocław. Kulczycki says that in some places in the capital of Lower Silesia he wants to create zones with several or even several dozen outlets offering eye payments to local residents. If there is an extensive acceptance network in a given area, customers will be more eager to register for the service.

How I paid with PayEye. And I don’t want to pay in any other way.

Here we come to another potential barrier: paying with eye scanning not only takes convincing shopkeepers to use the new service and providing them with not-so-cheap payment and identification devices, but you also have to persuade the consumers to register with the service and store their biometric data (recorded as the PayEye code) in the database.

The very process of registration with PayEye is no different from creating an account with any financial service. PayEye has a payment institution’s license, so it has to collect some data about each client. In addition to personal and address data, the standard procedure is to verify the identity card (a scan of the document is sent) and telephone number (text message verification).

After opening an account with PayEye and the first transfer you can already charge your account using the conventional DotPay payment gateway. The first payment has to be be done in a traditional way (according to a PFSA requirement it must not be an express money transfer), and the next ones can follow in a flash taking just a few minutes (no charges apply).

After registering for the service, you need to find a point where the system is already working (i.e. a merchant offering PayEye payments) and leave your biometric data there. To do this, you enter our phone number and password, and in this way you are linked to the correct account. And then just a quick look at the screen and the data is recorded. From now on, you can pay by eye.

I wouldn’t have a problem with “adopting” such an interesting and innovative service, but I guess that for many people the vision of registering in a new place, scanning their ID cards and then having to register their biometric data in a physical outlet can be a complication.

Of course: there is no need to register at the PayEye payment service point, you can do this at home, charge your account there and then come to your PayEye partner and complete the registration. And then use the PayEye payment right away or choose the option to complete the registration, e.g. When collecting an order (because you can pay this way to restaurants that offer home delivery).

At PayEye, they are exploring ways to target restaurants that accept payments by eye as the service points for attracting new clients and register their biometric data. This is a kind of place where you send some time, you can talk to the waiter and ask about some details, and the setting is perfect for that comfortable, deep look straight into the camera’s eye.

Iris scanning: is it safe? What if there is a data leak? Biometrics in payments: doubts

There’s also a security issue. Leaving biometric data to a company is all the more risky because the consequences could be irreversible if it were to leak. An iris eye scan is not a PIN that can be changed. Each of us has one unique iris that cannot be replaced just because the scan was stolen from the biometric database.

Fortunately, in this case – just like for other identification technologies using biometrics – no one stores the iris scan. Already at the stage of data recording by the device, the scan (and not the entire iris, but the selected fragment) is converted into a special code (PayEye code) and it is this string that is stored in the database, not the scan itself.

This is just the beginning of biometrics in payments, so PayEye won’t have an easy task. On the one hand, it will have to convince merchants that they should promote the new service and help it to develop, and on the other hand, it will have to overcome the natural laziness of consumers who already have enough convenient ways of paying in the shops not to want another. They are to be encouraged, among other things, by an advertising campaign.

But I have no doubt that anyone who pays by eye even once will not want to stop. Admittedly, there are situations where it is more trendy to pull out a black credit card, or we have a smartphone handy anyway which can be used for contactless payment, but sometimes two hands are not enough and the eye must come into play when paying.

‘The iris identification is the most effective way of human identification, of all biometric methods. When paying with PayEye you don’t need a wallet, credit card,  watch or phone, it’s just one look. This is another stage in the development of biometric payments which, due to its reliability and zero false rejection rates, has the potential to replace existing forms of user authentication.’

– says President Kulczycki. Paying in stores is of course a beginning but I imagine that this technology can also be used for e-shopping (consumers would have to have readers at home) or e.g. in interactive screens (for example the ones we know from McDonald’s). In combination with voice biometrics, this would technology would be able to find and show the merchandise on the screen to the customer in an instant, and enable an even quicker payment using an iris scan.

Bankers should be looking at this client identification method in the context of ATM transactions or the spread of unmanned branches where a video chat will replace employees and iris biometrics will be used instead of a printer and scanner for sending signed documents.

The biometrics revolution begins today and lucky are those of the inhabitants of Wrocław who will be the first to test it.