JP Morgan Payments is introducing biometric payment technology at specific pilot merchant locations in the US through a growing partnership with PopID, a facial recognition company based in California. This system allows customers to use facial recognition for payment verification, removing the need for physical cards or mobile wallets.
The technology, developed by PopID, a subsidiary of Cali Group, oversees the enrollment process, while JP Morgan Payments handles the transaction processing. The technology was initially launched in March of the previous year among physical retail stores, with South Florida Motorsports being one of the first to adopt it. A proof of concept demonstrated a 100% rate of transaction verification, with transactions being processed in less than a second.
Recently, the American restaurant chain Whataburger started to incorporate this technology, aiming to improve its existing biometric payment setup with the processing services provided by JP Morgan Payments.
Key Takeaways
- Expansion of Biometric Payments: JP Morgan is testing its biometric payment system, which was developed in partnership with PopID, at various retail and restaurant locations across the US. This move is part of a broader effort to evaluate and expand the use of facial recognition technology for payment processing.
- Enhanced Transaction Efficiency: The biometric payment system, which uses facial recognition for verification, aims to streamline transactions by eliminating the need for physical payment methods like cards and mobile wallets. This technology has demonstrated the potential to speed up transactions and improve overall efficiency significantly.
- Pilot Programs and Early Adoption: Initial tests have involved notable participants, including Whataburger and the Formula 1 Crypto.com Miami Grand Prix. Both have reported improvements in transaction speed and customer engagement, indicating a positive reception to the new payment method.
- Broader Industry Trends: JP Morgan’s initiative reflects a growing trend in the payments industry, with other major companies like Visa, Mastercard, and Amazon also exploring biometric solutions. These advancements highlight a shift towards more secure and convenient payment methods using biometric technology.
JP Morgan Expands Biometric Payments Testing with PopID at US Retailers and Restaurants
JP Morgan is testing biometric payments with PopID’s identification technology at increasing numbers of US retail stores and restaurants, preparing for a broader deployment next year. This initiative extends JP Morgan’s ongoing partnership with PopID, which specializes in biometric identification, to explore this technology with various US retailers.
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Biometric technologies are increasingly used for various purposes, from unlocking smartphones to securing building access. JP Morgan’s system is designed to simplify the checkout process by reducing reliance on physical payment methods and enhancing transaction security.
This technology involves securely capturing and storing biometric data, such as facial structures and palm and fingerprint scans. Once customers register their biometric data, they can pay by showing their face or hand at the checkout point. This approach eliminates the need for conventional payment methods like credit cards or mobile wallets, quickening transactions and minimizing physical contact.
According to research conducted by PopID, their platform reduces transaction times by 90 seconds each and can potentially increase average purchase amounts by 4%.
Jean-Marc Thienpont, Managing Director of Omnichannel & Biometric Solutions at JP Morgan Payments, stated that this initiative represents a significant advancement in enhancing the retail experience for their clients and introducing top-tier biometric payment solutions. He added that their offering is uniquely competitive, combining the reliability, scope, and credibility of a leading global bank with a fintech company’s innovative technology and flexibility.
The Formula 1 Crypto.com Miami Grand Prix was one of the first events to test JP Morgan’s biometric payment system, making it the inaugural Formula 1 race to incorporate such technology.
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Ramon M Peneda, VP & Chief Information Officer of the Formula 1 Crypto.com Miami Grand Prix 2023, expressed enthusiasm about collaborating with JP Morgan Payments on this innovative technology. He emphasized that Formula 1 is dedicated to adopting groundbreaking solutions and advanced technology. Implementing this biometric payment method, he noted, would improve the event experience by streamlining the payment process for attendees. He highlighted that the Miami International Autodrome aims to provide a premier experience, and this technology plays a key role in achieving that goal.
Whataburger, a fast food chain, is also testing the biometric payment method and has already implemented it. Whataburger has observed notable improvements with this system, including quicker transactions and more active participation in its loyalty program at both the counter and self-ordering kiosks. Once customers register their biometric data in the Whataburger mobile app, they can bypass the need to use their phones to scan QR codes for loyalty check-ins or payment authentication, streamlining the process with a simple biometric scan.
Whataburger, headquartered in San Antonio, Texas, operates over 1,000 locations across 16 states. The chain still needs to implement the new facial scan technology at all of its outlets.
Jerry Phillips, VP of Technology at Whataburger, expressed enthusiasm for the continued adoption of biometric payments, aiming to transform how customers purchase their food securely and dependably. Phillips noted that innovation is a core value at Whataburger, and this technology represents a key advancement in improving the dining experience. He highlighted that this new system allows for a quicker, safer checkout experience for customers, supported by the robust infrastructure of a leading financial institution.
Should these pilot tests continue to show positive results, the biometric payment system will be introduced to a wide range of merchants across the country, including quick-service restaurants, event venues, and stores. However, it will be available to all sectors.
JP Morgan’s announcement also referenced a forecast that biometric payments will engage 3 billion users and account for $5.8 trillion in transactions worldwide by 2026.
The Mechanics of Biometric Payment Processing
The biometric checkout system from JP Morgan Payments, developed in collaboration with PopID, utilizes facial recognition technology to authenticate customer identities and process payments. Initially, customers register by having their facial image captured and converted into a digital format, which is then encrypted and stored in the PopID cloud database. For purchases, the system compares a live facial scan with the encrypted template to confirm the transaction.
This system eliminates the need for physical IDs, phones, or cards, allowing payments through facial recognition at any participating store. It is compatible with various merchants, facilitating a universal application once customers register. Furthermore, customers can join or leave the service at their discretion, giving them full control over their involvement.
John Miller, CEO at PopID, expressed enthusiasm about advancing biometric payment and check-in solutions in partnership with JP Morgan Payments. He noted significant improvements in transaction speed and customer loyalty when implementing biometric solutions. He emphasized the importance of providing consumers with secure, flexible payment and authentication options in today’s market.
Additionally, JP Morgan commits to implementing standards for privacy, consent, transparency, and data minimization. Prashant Sharma, executive director of biometrics and identity solutions at JP Morgan, acknowledges biometrics’ concerns and emphasizes the company’s responsibility to build trust in this area.
Merchants can purchase tablets from JP Morgan Payments or use existing devices. They are also required to pay ongoing support fees and transaction and processing fees.
JP Morgan Is Not Alone in the Biometric Payment Processing Race
JP Morgan is not alone in pursuing biometric solutions for in-person payments. Visa is demonstrating its pay-by-palm technology at its Innovation Center in Singapore, anticipating a mainstream adoption of biometric payments within the next ten years. Similarly, Mastercard has partnered with NEC to incorporate facial recognition technology into its retail biometric offerings, having initially tested the service with Aramark, a food service company in Texas.
Amazon is also advancing in this space with its Amazon One system, which integrates into a retailer’s existing IT framework to merge loyalty programs and personalization features with payment processes. Amazon One, which combines palm and sub-surface imaging techniques, is claimed to be highly accurate and is currently implemented in over 500 Whole Foods stores, among other Amazon and third-party locations.
About JP Morgan’s Corporate & Investment Bank
JP Morgan’s Corporate & Investment Bank (CIB) is a major component of JP Morgan Chase & Co., one of the largest financial services firms worldwide. This division provides a comprehensive suite of services, including corporate banking, investment banking, treasury, and securities services, catering to governments, corporations, institutional investors, and financial institutions.
In particular, the CIB specializes in mergers and acquisitions (M&A), offering strategic advice for complex global transactions. The division is also a leader in capital markets, with deep expertise in debt and equity markets. It provides corporate financial advisory services as well, assisting clients in understanding market challenges and achieving their long-term objectives.
Additionally, JP Morgan’s CIB engages in financial transaction processing and asset management and offers strategies related to Environmental, Social, and Governance (ESG) issues. With a focus on technology and innovation, the CIB aids clients across various industries worldwide, supporting activities ranging from daily treasury operations to long-term strategic investments.
About PopID
PopID is a private entity specializing in developing facial recognition technology for identity verification. Established in 2016 by founders Sean Olson, Kourosh Gohar, Virginia Dadey, Dimitar Dyankov, and John Miller, the company is based in Los Angeles, CA. PopID’s system leverages biometric verification, enabling users to confirm their identity using facial or palm recognition for various purposes, such as loyalty programs, check-ins, ordering, building access, payments, event entry, and temperature screenings.
The software serves both individual consumers and businesses. Consumers benefit from using PopID for quick, device-independent payments at places like drive-thrus, while businesses can offer their customers and staff quicker, simpler, and touch-free interactions.
Conclusion
JP Morgan’s integration of biometric payment technology, in collaboration with PopID, represents a significant shift in the retail and restaurant payment landscape. By using facial recognition for transaction verification, this system aims to streamline the payment process, enhance security, and reduce reliance on physical payment methods. The successful pilot tests with various partners, including Whataburger and the Formula 1 Crypto.com Miami Grand Prix, highlight the technology’s potential to transform customer experiences through faster and more secure transactions.
As biometric payments become more prevalent, JP Morgan’s efforts, backed by robust privacy and data protection measures, are set to pave the way for wider adoption. The anticipated growth in biometric payment users and transaction volumes underscores the potential for this technology to redefine the future of payment processing. If these pilot programs continue to succeed, we can expect a broader rollout, significantly impacting how transactions are conducted across different sectors.
