FaceCash: Turning Our Cell Phones Into Wallets
FaceCash is a new mobile app that allows you to pay for items at the point of sale with a smartphone, instead of a plastic card. The cashier verifies your identity by the photo you upload into the app instead of by your signature on a credit card, which hardly ever gets checked these days. When the cashier scans the FaceCash barcode on your phone with a scanner, your picture will pop up on their computer screen. They then approve your payment. The FaceCash mobile app is available for iPhone and iPod, Android, and BlackBerry.
FaceCash is ThinkLink's mobile payment system. ThinkLink is a first-of-its-kind integrated payment and accounting system. Unlike traditional payment and accounting systems, which are separate, ThinkLink handles every aspect of business processes from invoicing to actual payment collection.
ThinkLink and FaceCash were created by Aaron Greenspan, the Harvard graduate who claimed in 2007 that his former schoolmate, Mark Zuckerberg, stole his idea for Facebook. Greenspan has been working on his payment technology for about ten years now, since he was managing the accounting technology for his family's business. If he does it right, FaceCash could be even more lucrative than Facebook. According to Edgar, Dunn and Company, the mobile payments market is expected to be $510 billion by 2012.
When you sign up, you can choose to link your FaceCash account to your checking or savings account at your bank. The minimum deposit is $20.00. As you spend with FaceCash, your FaceCash account is debited, but your bank account won't be debited until you decide to make another deposit. You can sign up without linking to a bank account and instead have someone transfer their FaceCash to your account, which would be great for parents to manage their children's spending.
So while Greenspan envisions FaceCash eventually replacing credit cards, FaceCash isn't a credit system. It is a debit system, which could mean he'll miss out on the consumers who like to float purchases on credit cards and make monthly payments. However, he is open to talking to banks if they want to offer credit on FaceCash.
Even without offering credit, FaceCash has some other pretty slick features. Unlike a credit or debit card, it can tell you your exact balance at the point of sale so that you can decide if you really want to make the purchase. You can also specify whether the payment is for personal or business purposes. If it's for business, the debit can be made from your employer's account, which saves both of you the time and hassle of reimbursing you. FaceCash can store your reward/loyalty card ID numbers and generate barcodes for them as well, so that you don't have to clutter your keychain or wallet with those cards.
Greenspan started testing FaceCash in March and it's now accepted at four restaurants in Palo Alto. For merchants to start accepting FaceCash, they have to buy a $30 barcode scanner and own at least basic computer with an internet browser, which they can also buy from Greenspan's company for about $150. Greenspan has offered a 60-day money-back guarantee for merchants if they don't like FaceCash or think it's worth the investment of a mere $180.
Another benefit for merchants is that FaceCash charges only a flat 1.5% on all transactions. Compare that with the 3.2% that a typical business pays to credit card companies, after various fees, transaction charges and routing taxes are factored in. Greenspan's company is a stand-alone payment system with its own authentication and payments processing technology. This frees it from relying on costly intermediaries. If a business gets $30,000 per month in credit/debit charges, FaceCash could help save that business $510 a month. It's easy to see how quickly a business could realize the ROI on FaceCash.