Stephen Wade has glimpsed the future and George Washington, Abraham Lincoln and Alexander Hamilton aren’t in it.
“If you look at trends, [2002 was] the first time in U.S. history that electronic payments surpassed checks,” said Wade, senior vice president of business development for Tier Technologies, a Reston-based company focused on integrated business solutions for government clients. “That in itself was a real eye opener as to where we’re moving as a cashless society.”
Tier Technologies is banking on that trend as it plots the company’s next move.
The company — founded back in 1991 by several former American Express execs — offers electronic payment options to more than 2,200 local, state and federal governments. Consumers can pay online using a credit card for a number of government expenses, including taxes. Tier’s biggest — and most well-known — client is the Internal Revenue Service, which processes millions each year in credit card payments.
But beyond the standard online payment, Tier is looking at more cutting-edge technologies to replace cash and checks — and even debit and credit cards. The company recently launched a pilot program on two college campuses that uses biometric technology as a method of payment. Students at North Texas University and Gonzaga University are piloting the program, which lets them use their fingerprints instead of a debit card to pay expenses on campus.
“They’ll be able to go to their bookstore, convenience store and no longer use their card. [They’ll be able to pay] for everything using biometrics,” Wade said.
While the program is still in its seed stage, Tier has partnerships with hundreds of colleges and universities across the country and expects the program to grow the next several years.
But biometrics may still be a few years from commercial viability, said Bob Egan, director of emerging technologies at the Massachusetts-based technology research firm TowerGroup.
“The question is, is it ready for prime time?” Egan said. “Biometrics is just one of the security tools that everybody is taking a look at. … I would look at this as a science experiment and just one of the options people are going to consider” as we move to a cashless society.
Tier is branching out from its traditional government clients in order to launch the biometric program because, said Wade, students are more open to embracing new technology.
“When you talk about biometrics, you’re talking about things that are very cutting edge,” he said. “[Students] are a target audience that generally accepts that kind of change.”
But even tech-savvy students, there may be a learning curve, Egan said.
“Paying for something with your finger is not yet instinctive,” Egan said.
Tier Technologies Inc.
» Services: Tier offers three primary services to its clients. The company’s subsidiary Official Payments Corp. provides online payment options for government clients.
Tier also provides child support payment processing, as well as software integration that allows clients to streamline back office functions.
» New ventures: The company is expanding its reach into the world of debit cards, providing pre-loaded cards through local government clients to those without a bank account. For example, Tier is working with multiple governments to distribute pension payments on debit cards.
» Revenue: The public company took in $151 million in 2005. However, Tier is currently going through a restatement of earnings after discovering accounting errors in 2001. The company’s books were off by between $2.2 and $2.7 million over several years. Despite the mistakes, the IRS renewed its contract with Tier in June.
» Number of employees: Tier employs 900 people total and about 120 at its Reston headquarters.
