Paying by iris and fingerprint - the next chip and PIN?

Shoppers in Oxford started to pay with their fingers this month, as the Co-op launched its trial of a biometric fingerprint payment system.

The scanner allows consumers to link their fingerprint to credit or debit card accounts when paying for groceries.

And a number of other companies and banks around the world are going down the same path.

Stores in the US already have Pay-by-Touch technology installed, with around two million shoppers paying using biometrics every week.

And banks are also looking at using technology such as finger vein scanners in ATMs.

Existing forms of payment - such as credit and debit cards - are under constant attack from hackers and fraudsters so banks and retailers are on the lookout for more secure technologies.

Stewart Hefferman, COO of ID verification company TSSI Systems, says biometrics are the way forward: "This is the next stage after chip and PIN. There is no arguing with biometric verification.

"Verification requires already having the details in a database - so although it can only work for existing customers, not new ones, it's quick and easy to set them up and the resulting ease of payment will aid customer loyalty."

And he predicted: "Within five to 10 years this will be mainstream, and the big high street players will have moved this way. From the retailers' perspective, there are huge benefits in terms of fraud reduction and customer loyalty with proportionately little outlay."

The government is moving the same way. Chancellor of the Exchequer Gordon Brown last month gave his backing for biometrics in the public sector. Passports and identity cards are both expected to include biometric identifiers.

But Hefferman admitted there are some drawbacks, as gaining customer confidence is a must: "A potential fly in the ointment is customer objections to 'Big Brother' techniques."

He added: "The best way round this is to implement solutions where the biometric data itself is stored on a card that the customer retains possession of. This is the way implementations on the continent have been carried out."

And Adrian Cannon, MD of consultancy Accourt, thinks the technology has yet to be proven.

He said: "Biometrics work well in compulsive environments, such as high security military establishments. Their use in mass consumer applications is unproven and questionable given the levels of risk that are being protected against.

And the added security may come at the cost of longer queues at checkouts, which may mean biometrics are resisted by consumers.

Cannon said: "The experience of chip and PIN is that anything that slows the payment process is unwelcome. Ironically, banks are beginning to experiment with high-speed and convenience factors, especially contactless cards. Consumer pressure is bound to create a demand to use these cards for all transactions.

"If the banks and retailers give in to this pressure then the use of chip and PIN, let alone even more inconvenient cardholder authentication methods such as biometrics will be hard to enforce."