Amazon, the US retail giant and the owner of Whole Foods is reportedly testing a new payment technology based on users’ hands.

Sources speaking to the New York Post have said that employees are testing the new technology at the company’s New York offices through vending machines selling cold drinks, granola bars, and phone chargers.

Though Amazon has neither confirmed nor denied the report, it is reportedly planning to introduce the system to a couple of Whole Foods stores by the beginning of 2020, before a national roll-out to its more than 450 stores.

What’s new: The tech, codenamed “Orville”, is different from fingerprint scanners such as those on mobile phones in that users will not have to physically touch the device. Instead, Amazon will use computer vision and depth geometry to identify the shape and size of a user’s hand before taking payment from a linked credit card.

Ultimately, the objective is speed. Typical card transactions, the Post says, tend to take between three and four seconds. According to sources, the technology under testing can process in less than 300 milliseconds. Engineers are working to make the technology as accurate as possible ahead of a potential launch.

The aim: Amazon’s focus has long been to become the world’s commerce platform. As such, the company has offered a payments API in the US since 2007, which has since expanded to markets around the world. Like many other retailers it also offers a handful of card products.

Recent innovations, such as its Amazon Go stores which include no cashiers or checkouts – charging a consumer’s card when they leave the store – have made headlines often for the sheer novelty of the experience. There is no friction to the experience.  

Reducing friction has brought direct revenue benefits. Edge, the digital research consultancy, says that in the short time the nine Amazon Go stores have been operational, they have generated 50% more revenue than the average convenience store of the same size. There is enormous potential to license this technology.

Not all customers are enthused by the idea of the checkout-free store, however. Research from Retail Week, published in June, found that half of surveyed British shoppers would be less likely to visit a store if it is checkout-free.

It is likely that for large purchases – Whole Foods is, after all, quite pricey – friction is still an important part of consumers’ perception of trust. The jump in payment systems for the US will be large. Whereas contactless cards have been issued in the UK since 2007, they remain in their infancy in America. Some form of verification in the shape of a users’ hand stands a chance of bridging the gap.

The Echo strategy: Unlike the payments API, this system will have to use hardware, which Amazon is experienced in producing and ruthless about pricing.

Amazon has become a leader in voice technology by getting its Alexa-enabled Echo product to as many people as possible before the next competitor. It can worry about profits later – they will come.

If Amazon gets this technology right – accurate, quick and trusted – it’s not a wild leap of the imagination to see the company flogging units to retailers for peanuts with the enormous promise of picking up valuable payments data in return.

Sourced from the New York Post, Edge, Retail Week; additional content by WARC staff