Making Business Decisions II

Citibank Singapore recently rolled out a new way for credit card holders to make payments using their finger prints. Customers use the system by pressing a finger to a sensor at the cash register and the purchase amount registers to the corresponding Citibank account. So far, the biometric payment system works only for Citibank Platinum card holders and is offered in a few local outlets including restaurants, clubs, and cinemas.

Companies doing business in some states may soon face stiff penalties for wayward security practices as they are considering legislation that would place these companies on the hook to pay for any costs associated with a data breach of their IT systems. This move to protect customer data in Massachusetts comes at a fitting time, as two prominent retailers in the area, TJX Companies and Stop & Shop, wrestle with the aftermath of significant breaches that have exposed some of their customers to fraud.

To this point, a lot of the expenses associated with stopping fraudulent activity, such as canceling or reissuing credit or debit cards, stopping payment, and refunding customers, have been absorbed by the banks issuing credit or debit cards to the victims. The merchant banks that allow businesses such as TJX and Stop & Shop stores to accept credit and debit card transactions are penalized with fines from Visa, MasterCard, and other credit card organizations if the merchants they work with are found to be in violation of the Payment Card Industry's data security standards.

The businesses themselves who have had customer data stolen have largely suffered only from the costs to offer customers free credit monitoring services and to repair a tarnished public image. In the case of popular retailers, this tarnish is easily polished away when juicy sales incentives are offered to get customers back.

PROJECT FOCUS:

  • How would a biometric payment system help protect the cafe and its customers?
  • What advantages could the cafe gain by implementing a biometric payment system?
  • What issues and concerns would you have if you decided to deploy the biometric payment system?

 

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