As a mechanism for payment, the credit card remains just as hardy as ever. It has so far defied the threat of mobile phones, and less plausibly, QR codes, among many other forms of payment.
One YC-backed startup is betting that fingerprints and other forms of biometric identification may be the payment method of the future though. Called PayTango, they’re partnering with local universities to offer a quick and easy way for students to use their fingerprints to pay instead of credit cards.
The four-person team is basically almost fresh out of Carnegie Mellon University. The co-founders, Brian Groudan, Kelly Lau-Kee, Umang Patel and Christian Reyes, graduating later this summer and have experience in human-computer interaction and information systems.
They built an initial prototype with a fingerprint scanner and credit card reader with off-the-shelf parts for between $1,500 and $1,700. They’re bringing the costs down after iterating on it for 10 weeks and they have a working version of it at three locations on the Carnegie Mellon campus.
“The very earliest product was just basic,” said CEO Umang Patel. “But it was a great product to get out there and users responded to it very early on.”
The on-boarding process for users is really easy. They touch the fingerpad with their index and middle fingers and if they’re not in the system already, PayTango automatically detects that. It will ask them to swipe a card to associate with their fingerprints and then enter in their cell phone number. That sign-up process made it fast enough for 100 students to sign-up within four hours on campus.
The reader plugs right into a merchant’s existing point-of-sale terminal and software. “We developed a way to integrate with the major systems and users don’t have to worry about these complex software integrations,” Patel said.
Of course, like all point-of-sale offerings, PayTango faces a huge chicken-and-egg problem. How do you handle outbound sales to small and medium merchants? How do you make sure sales employees are trained well enough to use the hardware and software? It’s a fairly difficult model to scale.
That’s why Patel said the company is focused on very dense networks of merchants and consumers — like the kind of you might see on a college campus where students repeatedly go to a few places for lunch. Gyms are another target market since the same small group of consumers have to quickly swipe in and out.
As for a business model, it’s too early to pinpoint that. But Patel said the company would consider charging a monthly subscription fee. He says if the pilot goes well, they’d push for a campus-wide roll out at Carnegie Mellon.