Samsung to revive finger swipe payments

Mocana's DeviceLine blog reports that fingerprint biometrics will be featured in the new Samsung Galaxy S5, to enable S5 owners to initiate payments with a swipe of their finger on their smartphone. Samsung has partnered with PayPal to offer payment services via this method, initially in 26 countries. The Galaxy S5's rival, the iPhone 5S, has an integrated fingerprint reader as well, but currently this can only be used in lieu of the 4-digit PIN when turning the iPhone on or taking it out of 'sleep' mode. While there have been rumors of payment enablement on subsequent versions of the iPhone, Apple hasn't come through with this so far. Score one for Samsung. This is not the first attempt to bring finger swipe payments to market : US startup PayByTouch had a whole merchant point of sale system built out to enable fingerprint based payment authentication in the mid-2000s, but the company crashed and burned.

The interesting thing is why. The Pay By Touch failure in 2007 was one of the most spectacular startup flameouts ever, the company having burned through $241 million in venture capital by the time they went out of business.  It was quite the drama, which I won't describe here but you can read about in the LA Times if you're interested.

Here's my point, though. Pay By Touch failed because of mismanagement, and not because the product concept wasn't sound. I always thought Pay By touch was a tremendous idea because fingerprint based payments authenticate the person making the payment, which cards don't do and never did. This makes for much better transaction security, while reducing the number of steps needed to complete a transaction (no fumbling in your wallet to find that one card you want to use).  And the technology lends itself equally well to online and point-of-sale payments. There's no such thing as 'card not present' (and all the headaches that accompany it), when fingerprint authentication is used.

Let's see if Samsung and PayPal can make a go of this, where Pay By Touch couldnt. I'm betting that they can.