Will That Be Cash, Card Or Finger?: U.S. consumers are being offered many new ways to pay. The real payoff may be in lower transaction fees for merchants.

While major issuers and payment brands are pressing U.S. retailers to accept contactless cards and fobs at their checkout counters, technology vendors are pushing other new ways for consumers to pay, including with their fingers. And a major selling point is that the biometric methods allow merchants the option of bypassing the established credit and debit card networks and potentially reducing their transaction fees.

While biometrics and contactless are not mutually exclusive, few merchants are likely to implement simultaneously two new payment methods. Given that the potential savings in transaction fees with the biometric system could be significant, it could be a major factor in the decisions made by some retailers.

Merchants will no doubt listen with interest to retailers like Kal Abhari, who says the fingerprint-biometric system he implemented last summer from a company then called BioPay saves him $400 per month in credit and debit card fees. The owner of a Philips 66 gas station and convenience store in Missouri, Abhari says nearly 1,000 customers have signed up, many of them no doubt attracted by the 4-cent discount on every gallon of gas for customers who pay by touching their finger to a scanner at the checkout counter.

"I'm extremely satisfied," Abhari says. "I wish all my customers would use BioPay."

A TIPPING POINT?

Banks control Visa and MasterCard, and merchants are seeking an equal footing in setting card rules and fees. Pay By Touch is "at a tipping point" where many merchants will soon adopt it, and this will dramatically affect the tug-of-war over fees, contends investment firm Sanford C. Bernstein & Co. in a research paper last fall.

"In our view, this will break the oligopoly of banks, acting collusively through Visa/MasterCard, in authorizing payment transactions, and lead to a slow collapse of the interchange umbrella," wrote analysts …