Pay By Touch
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Pay By Touch (Solidus Networks, Inc., dba Pay By Touch) was a San Francisco biometric payments startup founded by John Rogers. It let shoppers pay for purchases with a fingerprint instead of a credit card or cash, selling its technology to grocery and retail chains, and also ran personalized-marketing products such as SmartShop kiosks.
02 / Pay By Touch FAILURE REASONS
Failure reasons
Pay By Touch collapsed under extreme cash burn and governance failure. Despite raising roughly $340 million ($190 million in financing plus a $163 million investor loan), it was spending about $8 million a month and had to cut its biometric service for lack of funding. Investors alleged founder John Rogers impaired the business through lavish spending and drug abuse — claims Rogers' lawyer denied — while his super-voting stock left the board unable to restrain him. Employees and lenders forced the company into Chapter 11, and in March 2008 it shut down its biometric transaction processing. The fallout left behind a database of some three million customer fingerprints and directly inspired Illinois' 2008 Biometric Information Privacy Act.
03 / EVENT HISTORY
Events in the structured record
- Rapid expansion
Pay By Touch raises about $190 million in financing and signs major grocery chains, promising fingerprint payment in stores nationwide.
- Bankruptcy filings
An involuntary Chapter 11 petition is filed against Solidus Networks on November 1, 2007; founder John Rogers files for personal bankruptcy; Solidus files for Chapter 11 protection on December 14, 2007.
- Service discontinued
Solidus Networks announces that as of March 19, 2008 it is no longer processing biometric transactions, citing lack of funding and market conditions.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
An involuntary Chapter 11 petition was filed against Solidus Networks on November 1, 2007; the company filed for Chapter 11 on December 14, 2007.
- 02
The company's core assets were auctioned to pay creditors; non-biometric business units were sold or wound down separately.
- 03
Biometric transaction processing was discontinued effective March 19, 2008.