In late summer 2005, Accelitec, a Bellingham, Wash., startup, launched an RFID-enabled payment platform designed as a retailer-focused version of contactless payment systems emerging from the three big credit card associations: American Express, MasterCard and Visa. Dubbed PayPilot, Accelitec’s new technology supports cards issued through all three organizations, as well as others based on prepaid accounts and electronic-check transactions.
The latter option is designed to save retailers from having to pay the relatively larger processing fees associated with credit or debit transactions. By offering incentives to consumers using PayPilot in this way—in the form of loyalty points or other special discounts for prepaid or e-check transactions—retailers can motivate their customers to sign up for PayPilot accounts (see Accelitec Unveils RFID Payment System).
Well over a year later, however, just one retailer—The Woods Coffee, a four-store chain in northwest Washington—has deployed PayPilot, in this case, under the brand name Speed Bean. The system has been well received by patrons, with 3,500 Speed Bean RFID fobs issued to date—for the sake of perspective, the town containing three of the four stores has only 11,500 residents—while more than 13 percent of the transactions made at the four locations use the Speed Bean fob. During the holidays, the company says adoption spiked as Speed Bean prepaid fobs became a popular stocking-stuffer gift idea.
“We let the retailer set the rules,” explains Fred Miller, Accelitec’s director of business development. “Some have talked about using it just as a loyalty device. The key is that we link into the merchants’ own payment platform, so the type of payments they’ll accept [under, for instance, a loyalty card program] is up to the merchant.” Working with retailers to customize the PayPilot program to their needs, Miller explains, is what sets the PayPilot apart from the RFID-enabled cards issued by banks.
“The merchants can reach out to their consumers [with the PayPilot program],” says Miller. “When we talk with some merchants, such as pet stores or other specialty stores, they talk about having such a strong bond with customers.” PayPilot is designed to help retailers personalize their interactions with consumers to build on their customer relationships. When a customer presents a PayPilot payment fob, it can call up a list of purchasing preferences that person indicated when initiating the account.
According to Miller, Accelitec has been in discussions with a number of other retailers as well, though none have yet signed on the dotted line. That may soon change, thanks to a partnership Accelitec has forged with Fujitsu Transaction Solutions, a Frisco, Texas, provider of point-of-sale hardware and software systems, as well as RFID integration services (see Fujitsu Offering RFID Services, Readers ). Fujitsu has incorporated the PayPilot payment platform into its point-of-sale and customer-loyalty applications. As a reseller of the PayPilot platform, Fujitsu Transaction Solutions is now pitching PayPilot to some its customers. The company provides its services to a long list of retailers, including Hallmark, Kroger, Loblaw, Nordstrom, Payless ShoeSource, PetSmart, Regal Cinema and Staples.
The PayPilot system consists of a self-service kiosk consumers can use to open new accounts. Once an account is established, the kiosk dispenses a key fob with an embedded ISO 14443-compliant 13.56 MHz passive RFID inlay encoded with a unique ID linked to the consumer’s account. The platform also includes a consumer-facing interrogator, networked with the retailers’ point-of-sale terminal and used to read the payment fob. The interrogator sends the fob inlay’s unique ID number to the PayPilot software application, which Fujitsu has incorporated into its GlobalSTORE point-of-sale platform.
The program uses the ID to pull up the consumer’s account and payment preference information from a secure database, then sends the appropriate payment information through the retailer’s transaction software to initiate the payment—whether this involves deducting the amount due from a prepaid account, processing the payment via the account-holder’s credit card account information stored in the secure PayPilot database, or transacting an e-check by means of the North American Automated Clearing House (ACH) Network to make a withdrawal from the consumer’s bank account. David Naumann, senior public relations manager for Fujitsu Transaction Solutions, says retailers can brand and customize the PayPilot program to fit their needs. It can be used alongside payment terminals designed to accept magnetic-strip or RFID-enabled credit or debit cards.
Miller and Naumann indicate that PayPilot transactions are secure. The unique ID encoded to the fob is encrypted, using public and private keys so only authorized PayPilot interrogators can read the number encoded to the fob. Consumers can choose to link a digital headshot of themselves to their accounts. The image appears on the retailer’s sales terminal and is used as a means of authenticating an authorized user. Consumers can also opt to have a text alert sent over SMS to their cell phones each time a transaction is posted to their accounts, enabling them to spot any invalid purchases.
In the future, says Miller, consumers using NFC-enabled cell phones with Microsoft mobile operating systems will be able to make PayPilot transactions via their phones.