AutoID & Data Capture Blog

Palm Reading at the Checkout – Decoding Amazon One

by Chad Meyers, Andy Adelson & David Krebs | 10/5/2023

With the newest frictionless technology, people can make payments, enter venues, and identify themselves with just their bare hand. Amazon is making this possible through its Amazon One system with palm reader terminals. The reader identifies people based on the unique biometric signatures of their palms, and taps into user data for credit card payments, identification, age verification, entrance to a building or garage, loyalty cards, and more. Readers are cropping up around the US in 500 Amazon-owned Whole Foods, plus a number of third-party outlets at stadiums, airports, Panera Breads, Starbucks, and elsewhere.

While Amazon One transacts sales, additional functions such as checking identifications, verifying ages, and showing membership and loyalty cards are expected to deliver the full value of this new technology. It offers the potential to break bottlenecks in crowded venues and rush-hour retail settings. Its benefit for both consumers and merchants could grow exponentially if Amazon One becomes ubiquitous across grocery, entertainment, travel, and more.

Amazon is evolving its frictionless offering beyond “just walk out”. Rather than eliminating checkout, this speeds up payment and related identification-based tasks. Retailers would be reluctant to invest if this were only for payment, but some will see benefits from identification and access control possibilities. Store managers probably appreciate that there’s no need to renovate stores with expensive shelf sensors, ceiling cameras, and entry turnstiles that “just walk out” required. Heavy users will probably like the speed and convenience.

Amazon strives for Amazon One to become a widely accepted full-service digital wallet, competing with Apple Pay and Google Pay. Apple and Google each make over $2B per year for payment processing and related services. VDC believes this is the market that Amazon truly seeks.

That said, there are two main reasons for resistance: customer concerns and marginal gains. Customer concerns begin with the multi-step, two-stop enrollment process. Most heavy users already have an Amazon account, but newcomers need to start by creating one, usually at home. They complete setup at any location with a palm reader, which captures multiple images of the palm. VDC visited Whole Foods locations with Amazon One. Stores offer no technical or promotional support. This may change, given that Amazon is early in its rollout. VDC expects that many people will resist having their hand scanned and linked to personal and financial data, stored by a cloud-services company. Warranted or not, hundreds of on-line posts raise this resistance. A small percentage of consumers tolerate the enrollment and privacy concerns, but Amazon One is likely to face resistance or inertia from the mainstream.

The second concern revolves around marginal gains. For payments, checkout is barely faster. For identification and access, Amazon One might only matter for a few people or in a few places, and will only deliver significant benefit if it gains critical mass. Even if Amazon One gains broad adoption, people are unlikely to leave their phones and wallets at home.

While Amazon One enjoys mandated adoption at 500 Whole Foods, it’s less likely to have immediate appeal with most third parties. Retailers with crowds — stadiums, airports and the like — are good candidates. However, the majority of merchants will invest in other technologies such as new bioptic and single-plane POS terminals. VDC’s 2023 report on Point of Sale Scanning Technology details numerous technology trends supporting this, and the relevant activities of every leading vendor.

As an interesting parallel, airports are implementing Clear for TSA. Instead of presenting ID at security, Clear-enrolled airline travelers scan their retinas. Retina scanning is hardly faster than a TSA agent reading a flyer’s license. The real time-saver is not waiting in line, because TSA runs Clear-only lanes. Retailers don’t match this with One-only checkout lanes. Comparing enrollment, Clear also has a two-part (home and airport) process, plus poses privacy concerns over giving government agencies access to personal data via biometrics. Clear is impressive technology and much appreciated by some frequent flyers, but it has not gained widespread adoption, nor has it lightened rush-hour TSA bottlenecks.

VDC’s analysis is that the palm reader looks like revolutionary payment technology but it’s only a small improvement in retail checkout. Whole Foods managers commented that initial usage has been minimal. This suggests that there’s not pent-up demand for manual checkout. Perhaps adoption will grow over time. Amazon pairs its Palm with an RFID reader in two Seattle RFID-based just-walk-out apparel formats but the “wow” here comes from RFID rather than Palm, and the checkout lanes also have traditional credit card readers.

Continual improvement of checkout is an important goal for POS technology. Checkout always benefits when it’s simpler and speedier. VDC expects Amazon One to be at least a small step toward this goal. It took nearly a decade for Apple and Google to achieve billions of dollars of sales from their Pay platforms. If Amazon One is to succeed, it is likely to take several years.