magine calling your local Pizza Hut and ordering a pizza for delivery. When asked how you would like to pay, you say, "Biometrics," answer a few questions and within 30 minutes your pizza is delivered, with the payment transaction already completed. There's nothing to sign, no check to write, and no cash changes hands.

How did this happen? The phone system simply recognized your voice and debited your checking account. Sounds pretty cool, huh?

In our industry, the concept of contactless payments is hot. While these solutions certainly have a wow factor, what do they mean to ISOs and merchant level salespeople (MLSs)? How do they affect an ISO's revenue stream?

After all, new payment options can be entertaining, but ISOs and MLSs need a solution that, in the end, is going to increase their bottom line: They need a contactless program that merchants will promote and consumers will use.

One contactless biometrics company, IDentesys, understands this concept and strives to create contactless payment programs that are financially beneficial for all involved: the consumer, the merchant and last, but certainly not least, the MLS.

IDentesys has designed programs, such as the one at Pizza Hut, that make contactless biometrics payment programs (such as iris or voice recognition) simple for consumers to set up, effortless for merchants to use and profitable for ISOs and MLSs.

Rewards for merchants and consumers

IDentesys recognizes that it doesn't matter how cool a product is if merchants don't promote it and consumers don't use it. That is why Sean Kumar, Chief Executive Officer of IDentesys, has created incentives for both consumers and merchants. These incentives help ISOs and MLSs increase overall sales, and thus their revenue.

When consumers use an IDentesys product, they earn loyalty points, which they can redeem for free products, services or rebates at various participating retailers. Merchants earn revenue from the sale of nearly all of IDentesys' products and services. These perks encourage customers and merchants to support the program and increase ISOs' earning power.

The eyes have it

Based in Georgia, IDentesys specializes in the integration of contactless biometrics and radio frequency identification-enabled (RFID) payments. The company employs 19 people worldwide and has contracts with retailers and trade organizations to deploy contactless biometrics payment solutions in more than 600 retail locations.

Many other companies offer contactless payments and biometrics. However, Kumar and Mike Thompson, Director of Business Development, are quick to point out the differences between IDentesys and its competitors.

"Governments and banks will move to iris recognition technology because it is more accurate and less intrusive than fingerprints and offers 100% protection," Kumar said. "Our competitors are using fingerprints. That has been proven to be not as efficient, or secure, and is highly intrusive. Then, there are problems associated with the registration of fingerprints; you cannot build a fingerprint database."

Thompson said that fingerprint technology can be inaccurate as well. "These programs are just hitting certain points of the fingerprint; it's not the entire fingerprint, so the database may pull up 10, 20 or 100 different people [as a possible match]," he said.

Instead of fingerprint technology, IDentesys has chosen to focus on other options such as iris, face and voice recognition. "We've taken all the time, energy and dollars to do it right," Kumar said.

Say cheese

IDenteCheck was IDentesys' inaugural biometrics payment product. It has found a niche as a compliance and risk-management solution for money service businesses, such as check-cashing centers and convenience stores, using only fingerprint technology. Since IDenteCheck's debut, the company has been working on its flagship product, Pay by Smile.

Pay by Smile is a Web-based proprietary payment gateway that uses a consumer's iris, face and voice in various methods to process payments. Its implementations include traditional venues, such as check cashers or retailers. It can also be used to purchase prepaid phone card minutes, cell phone ring tones or movie tickets. Pay by Smile version 2.0 will also dispense coupons; manage loyalty programs; process credit, debit and EBT transactions; and capture check images.

Pay By Smile helps merchants increase sales by offering additional services; it also benefits merchants by helping them remain in compliance with state and federal regulations. "Pay By Smile is the only product of its kind that provides complete compliance on the state and federal levels while providing additional revenue streams to the client and value benefits to the consumer," Kumar said.

Later this year, IDentesys plans to release Pay by Smile in a self-serve kiosk version. Using these kiosks, consumers will be able to surf the Internet, seek directions, download movies, and purchase gift and phone cards.

Merchant benefits

Now that we understand a bit of what IDentesys offers, let's get back to the important issue: What makes merchants and customers want to use the products, and how do ISOs and MLSs earn money?

IDentesys' loyalty cards are universally accepted by merchants within IDentesys' closed-loop network. This allows the merchant who sold the product to earn a commission when the product is used at another merchant location.

Let's assume, for instance, that Merchant A registers a customer while cashing a check. At that time, Merchant A issues the customer a loyalty card. The next day the customer travels to another store, presents said loyalty card or has his or her iris scanned and buys a money order from Merchant B. Merchant A earns a commission from the sale, thus creating a recurring revenue stream for Merchant A.

"Even if a merchant loses some business, they will still get a residual amount. This is the first biometrics program to generate residual income for the merchant," Kumar said. This added revenue is incentive for the merchant to promote the service, thus increasing the ISO's revenue.

Customer benefits

Merchants are not the only ones who benefit from IDentesys transactions. Simply by using IDentesys products and services, customers can earn points toward rewards, such as free products, services or rebates.

Merchants can customize store-level or chain-level promotions to best meet their needs. Merchants determine how points are earned and redeemed: A given number of points could equal a free service or a discount on merchandise.

"A merchant may decide to issue five points for every money order a customer purchases and 10 points for every check the customer cashes," Thompson said. IDentesys' centralized gateway manages settlement and reconcilement of points and rewards.

The company plans to offer incentives at its kiosks, as a way to encourage consumers to register. For example, if consumers use kiosks at a mall, they may receive coupons to use at that mall. Thompson explained that such programs reward merchants and customers for taking the two minutes it takes to register. Registering is free to both the consumer and merchant. "We are trying to make it win/win for all involved," Kumar said.

A true partner

Both Thompson and Kumar have experience working as MLSs, so they have an insider's perspective on the unique challenges MLSs face. They are interested in working with more ISOs and MLSs and encourage interested parties, no matter how small, to give them a call.

"IDentesys is a true partner and will support or help customize the solutions to the needs of ISOs," Thompson said. ISOs set their own rates, prices or markups. "ISOs are given cost in all areas; they receive 100% of the mark-up over the buy rate," Kumar said.

The company also offers ISOs the ability to private label IDentesys' software and related services. "When I was an MLS I would have loved to have a software product onto which I could put my name," Kumar said.

Thompson noted that money orders or loyalty cards can carry the logo, brand name and contact information of the ISO or MLS. "The same will apply to the self-service kiosk program. Thus, an ISO can truly integrate to his or her brand and collection of existing products," he said.

ISOs and MLSs can choose to have IDentesys as involved or hands-off as they wish. "If you are an MLS with seven reps, you may want to run your own show: pay your reps on your own, bill merchants on your own, etc.," Thompson said. "In this case, the MLS runs their own back end and front end. We act just as a processor."

On the other hand, smaller offices may benefit from having IDentesys do their billing for them. In that case, IDentesys will handle the processing and billing, but the ISOs or MLSs will still have their own private label.

ISOs and MLSs benefit from additional support such as free telemarketing and advertisements in trade magazines. IDentesys also shares leads and corporate accounts. "If we have a good rep in a specific market we will disperse the lead to them," Kumar said.

IDentesys is currently implementing its solutions with non-banking financial institutions, grocery stores, gas stations, convenience stores and any business that offers check cashing or provides a bill payment service. This means the potential market for ISOs and MLSs selling IDentesys services is limitless.

Business ideas are not worth implementing unless they can make money. That can be said for any industry but is especially true for financial services. For contactless payments, the trick is to get merchants and consumers to support the product, so ISOs and MLSs can increase their overall sales.

IDentesys is focused on that goal and encourages ISOs and MLSs to join them.