Solidus Shuts Down Pay By Touch Service

Apr 03, 2008 3:11 AM  By

Solidus Networks, which filed for bankruptcy late last year, has shut down its Pay By Touch biometric payment service. The fingerprint scanning and authentication system was used by retailers to give customers a faster and more secure way to make purchases.

The San Francisco-based Silicon Valley start up abruptly discontinued the service as of March 19 because it “could no longer support the biometric authentication and payment system as it currently exists, based on lack of funding and current market conditions,” according to a statement on its Website. Calls and e-mails to Pay By Touch were not returned by press time.

Pay By Touch had been deployed at more than 2,600 retail locations in the U.S. and more than 4 million shoppers had used the system to conduct transactions since it was first introduced in 2002. Among the hundreds of retailers using the payment system were grocers Albertsons and Piggly Wiggly and Shell Gas, which was in the midst of trialing the technology at about 10 of its gas station/convenience store locations in Chicago.

The technology enables store customers to make purchases by placing their finger on a biometric reader (similar to the fingerprint scanners used to secure laptops). The system identifies a customer via the unique characteristics of his or her print, which are difficult to duplicate, and the purchase is automatically charged to the customer’s bank or credit card account.

Customers had to enroll in the service order to be able to use it. Retailers that offered the system, as well as Pay by Touch, have reassured customers in recent weeks that all fingerprint data is secure and that all system equipment and data will be destroyed to prevent identity theft.

Solidus, which is currently undergoing restructuring, wants to divest itself of Pay By Touch, as well as its ATM Direct and Payment Solutions divisions, which continue to operate under the protection of the bankruptcy court. Other core subsidiaries, including Loyalty Acquisition and S&H Marketing Services are not part of the filing will continue to operate as normal. The company’s BioPay Paycheck Secure business was recently acquired by Phoenix Check Cashing for an undisclosed sum.