Wednesday, January 25, 2006

Wal-Mart, Costco Fingerprint Payments


Wal-Mart, Costco weigh biometric payment system CNN story pointed out by PrivacyWar blog in response to my previous post praising Costco for refusing to turn over customer address information to British Columbia provincial government seeking sales taxes from Alberta customers of Costco.

Once again demonstrating that if information exists, that data will be mined for revenue enhancement, theft or law enforcement. Wal-Mart and Costco's goal is revenue enhancement gained by reduced costs of payment processing and speedier checkouts.

The threat of theft via dishonest employees, hackers or others with data access becomes a looming monster over valuable fingerprint records of customers combined with other personally identifiable data, making protection of that data another critical cost center that may be ignored by the giant retailers. There is little profit in proactively protecting customer data - it becomes an afterthought when data leaks or thefts or warrants lead to unwanted negative publicity.

Finally, once government and law enforcement know of the existence of the fingerprint databases at Costco and Wal-Mart, they will subpoena and seek by warrant, any data they can convince a judge they need.

The value of the information held by retailers is already huge. I was surprised recently when returning a product to Staples that they required my driver license and address information to complete the return. When asked why, I was told it was to flag frequent returned items tied to specific individuals who abuse that priviledge. Here is a San Francisco Chronicle story detailing the customer returns database practice and the company mentioned in that story, called "Return Exchange, Inc." based in Southern California.

More new companies are being launched daily to gather and share different types of information with retailers. Who is to say which of those companies Wal-Mart and Costco will share those customer fingerprints with - fingerprints linked to financial information required to process biometric payments? Who has access internally and externally to that financial and fingerprint data held by those retailers and how is that precious data protected?


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posted by RealitySEO at 11:40 AM

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