By Mary Catherine O'Connor
 
Jan 25, 2007__In late summer of 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. Called PayPilot, Accelitec's technology supports cards issued through those three organizations, as well as ones that are based on prepaid accounts and electronic-check transactions. The latter option saves the retailer from having to pay the relatively larger processing fees associated with credit or debit transactions. By offering incentives to consumers that use 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).

But well over a year later, just one retailer¡ªThe Woods Coffee, a four-store chain in northwest Washington¡ªhas 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 (for perspective: the town in which three of the four stores are located contains only 11,500 residents) and more than 13 percent of the transactions made at the four locations use the Speed Bean fob. During the holidays, 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 is what sets the PayPilot apart from the RFID-enabled cards issued by banks, explains Miller.

"The merchants can reach out to their consumers [with the PayPilot program]," he says. "When we talk with some merchants, such a pet stores or other specialty stores, they talk about having such a strong bond with customers." PayPilot is designed to help retailer personalize their interactions with consumers in order to build on their customer relationships. When a customer presents a PayPilot payment fob, it can call up a list of purchasing preferences indicated by that person when initiating an account.

Miller says that Accelitec has been in discussions with a number of other retailers, but so far none have signed on the dotted line. But that may soon change, thanks to a partnership Accelitec has forged with Fujitsu Transaction Services, 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 Services is now pitching PayPilot to its customers, which include such retailers as Hallmark, Kroger, Loblaws, Nordstrom, Payless ShoeSource, PetSmart, Regal Cinema and Staples.

The PayPilot system consists of a self-service kiosk that consumers use to open a new account. Once the 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 (used to read the payment fob) that is networked with the retailers' point-of-sale terminal. The interrogator sends the fob inlay's unique ID number to the PayPilot software application, which Fujitsu has incorporated into its GlobalSTORE payment platform.

The program uses the ID to pull up the consumer's account and payment preference information from a secure database and sends the appropriate payment information through the retailer's transaction software to initiate the payment, whether it is to deduct the amount due from a prepaid account, process the payment via the account-holder's credit card account, which is stored in the secure PayPilot database, or transacted as an e-check, which uses 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 that the PayPilot program, which retailers can brand and customize to fit their needs, can be used alongside payment terminals designed to accept magnetic-strip or RFID-enabled credit or debit cards.

Miller and Naumann say that PayPilot ensures retailers and consumers that transactions will be secure. The unique ID encoded to the fob is encrypted, using public and private keys, so that only authorized PayPilot interrogators can read the number encoded to the fob. Consumers can choose to have a digital headshot of themselves linked to their accounts. The image appears on the retailer's sales terminal and is used as a means of authenticating that they are the 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, in order to spot any invalid purchases.

In the future, says Miller, consumers who use NFC-enabled cell phones that use Microsoft mobile operating systems will be able to make PayPilot transactions using their phones.

source:  www.rfidjournal.com