Will Amazon’s $10 Palm Swipe Inducement Pay Off?

Amazon will reportedly pay shoppers $10 worth of credits if they start using its palm print scanning technology, Amazon One. The new promotion was first spotted by TechCrunch, though there’s been no official announcement from Amazon yet.

Amazon One was launched in September 2020, with the company presenting the technology as an easier, contactless way to pay for goods sold in its physical stores. The company has also pitched Amazon One as a possible identity service that could be used at entertainment venues, for example enabling admission to someone who’s already paid for tickets at a concert.

To use Amazon One, a person just holds their hand over a scanner for a brief moment, and it will automatically recognize their palm print based on the pattern of lines, veins and ridges that’s unique to every individual.

Read more: Getting A Hand-le On Amazon’s New Pay-By-Palm-Print Service

The idea is it provides a faster and easier, contactless way to pay. Amazon One is just one part of the company’s Just Walk Out initiative which envisages an entirely friction-free shopping experience. The company is also planning to make the technology available to other retailers in order to scrape some of the brick-and-mortar revenue generated by its rivals.

At present, Amazon One is said to be available in 50 locations, including some of Amazon’s Whole Foods stores. The company said in April that “thousands” of customers have already enrolled.

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For all the promise though, Amazon’s offer of $10 worth of free stuff suggests people aren’t itching to use Amazon One as much as it had hoped. So, will Amazon’s offer of free cash make any difference?

The company faces an uphill battle. Biometric payments systems are not a new concept, but they have yet to catch on. One of the earliest offerings based on fingerprint scanning technology launched by the grocery chain Piggly Wiggly way back in 2004.

That company’s Pay By Touch program enjoyed an apparently successful pilot when it first launched in the Southeast U.S., but it ultimately came a cropper due to a number of problems. The first issue was that Pay By Touch wasn’t linked to shopper’s credit or debit cards. Instead, it was based on the automatic clearinghouse network, and the transition from Swipe and PIN to fingerprint scans plus ACH transfers didn’t go down well with consumers. It was also complicated to sign up.

More troubling though was the actual technology used to implement Pay by Touch. It simply wasn’t up to scratch, with a high “fail rate” because the scanners weren’t accurate enough. Piggly Wiggly ultimately ditched the idea after wasting millions trying and failing to fix it.

See also: Can Amazon Give Biometric Payments A Hand — In The Store?

Another failed effort happened at the Chicago-based Jewel and Osco grocery chain, which also went with fingerprint scanners. While that effort wasn’t unpopular with shoppers, it too had problems with accuracy. Though Jewel and Osco did attempt to improve the technology, it ultimately gave up on the effort when its payments processing partner Solidus Networks abruptly shut down its biometrics business.

Amazon One has seemingly overcome these reliability issues, but the other obstacle in the company’s path is privacy. There remains a large cohort of consumers who are wary of handing over any biometric data to big companies such as Amazon. Or indeed, especially Amazon, as they know full well that data will be used to track them and their shopping habits.

Amazon has done its best to dampen privacy concerns. When it launched Amazon One it pointed out how users are free to delete their palm prints from its system at any time. It further assured customers their information will be automatically deleted if the service isn’t used for two years.

The $10 inducement will be met with skepticism though, if only because of Amazon’s somewhat dubious track record in biometric technology. The company has taken a lot of flak for pushing new tech in uncomfortable ways. The most notable example may be the biased facial recognition systems to law enforcement agencies. Although it vigorously defended its Rekognition technology at first, the company eventually caved in and banned sales of that platform to police.

Further reading: Amazon Shareholders Defend Facial Recognition Tech

There have been other controversies around biometrics too. Privacy advocates will recall the furor around a startup called Clearview AI a couple of years back. That company created extremely facial recognition tech that was sold to law enforcement agencies. A New York Times investigation revealed that Clearview was letting law enforcement use its software to match any faces not in their own databases to images posted on sites like Google, Twitter and Facebook, in order to try and identify who they belong to. Clearview AI only stopped after the social media giants sent cease and desist letters asking it to end the practice.

The episode did much to heighten the general public’s lack of trust in facial recognition and similar technologies, which can be extremely invasive when misused.

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Perhaps the best thing going for Amazon at this time is that consumers have shown plenty of enthusiasm for contactless payment tech, according to PYMNTS data. In May’s Omnichannel Grocery Report, created in partnership with ACI Worldwide, 43 percent of consumers said they’re either “very” or “extremely” interested in using contactless credit cards, and 27 percent of consumers said they have already used them.

More proof of demand for contactless tech came from Visa’s “Future of Urban Mobility Survey” in July. In that study, 88 percent of transit commuters said they consider contactless payment to be “important.”

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In terms of convenience, Amazon One is certainly a big winner. It’s just about the most frictionless verification technology anyone has ever come up with – no more fumbling around in a handbag to find a wallet or a smartphone to scan a QR code. Just wave and pay. It’s dead simple, no one is arguing with that.

But for all of the convenience Amazon One might provide, Amazon’s free cash promotion implies that a lot of people still aren’t willing to sacrifice yet more of their privacy for it.