PayPal is trialing a systems that lets shoppers use their online profile pictures to authenticate transactions and pay for merchandise.
The company, which provides a service for e-payments and money transfers, is testing its mobile-phone based system with shopkeepers along London's Richmond High Street. The goal is to make obsolete the real world wallet.
But with all the questions surrounding the true accuracy level of computer-based biometrics, is simple human observation of a photo enough to go on to complete a financial transaction?
Is convenience trumping security in this case for both the consumer and the retailer? PayPal's system is not based on computer-generated biometrics, but is verification by recognition.
A shopper locates stores that accept mobile payments using the PayPal mobile app, which has been updated with a "Local" tab. Twelve businesses, from restaurants to clothing stores, are participating in the initial pilot in London.
Once a participating business is located by the app, the shopper "checks-in" much like they would on Facebook or Foresquare. The shopper's profile picture is then added to the merchants point-of-sale system.
When the shopper is ready to pay for their merchandise, a cashier clicks on their profile picture to complete the transaction. The shopper gets a receipt on their phone along with PayPal verification of the transaction.
Critics of the system say manual recognition is prone to human error and may prove too risky for financial transactions.
Andy Kemshall, technical director at SecurEnvoy, told ComputerWorld UK, "When you're providing a security service for your customers it needs to be 99.9% perfect at the very least. Biometrics are nowhere near that level of reliability, especially methods such as manual face recognition."
Is PayPal's system viable in the long run? Is it less risky than accepting a credit card? Will the rate of error prove to be the real risk? Who shoulders the liability? Will the fact retailers have thousands of customers in a database slow down the completion and accuracy of transactions?
With all the virtual automating and verification of authentication that has been developed over the past decade, is PayPal's system merely a simple twist on a well-understood payment procedure or a breakthrough on the virtual wallet?