Retailers are thinking about selling alcohol and tobacco using biometrics

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Large grocery retailers are looking for options for greater self-service checkout (CSR) automation. X5 Group, the manager of the Pyaterochka and Perekrestok stores, asked the Ministry of Digital Transformation about the possibility of using biometric personal data to confirm the age of alcohol and tobacco buyers through CSR, which will relieve employees. By law, retailers have this option, but surveys show that many consumers are skeptical about submitting biometrics for purchases.

The director for interaction with state authorities of X5 Group (Perekrestok, Pyaterochka, Chizhik networks) Stanislav Bogdanov in June turned to the Ministry of Digital Transformation with a request to clarify the interpretation of legislation on personal data, a source close to the ministry told Kommersant. According to the source, Mr. Bogdanov was interested in whether data from the unified biometric system (UBS) could be used to verify buyers of tobacco and alcohol, which would allow not requiring a passport for CSR.

As of March 31, X5 operated 21.76 thousand stores. The group’s revenue in the first quarter of this year grew by 15.2% year-on-year to RUB 696.36 billion, EBITDA increased by 0.9% to RUB 70.19 billion.

Stanislav Bogdanov confirmed to Kommersant that X5 sent a request to the Ministry of Digital Transformation to clarify the use of biometric personal data to authorize the sale of alcohol and tobacco on CSR. X5 Group expects that this method of age verification will be in demand among customers who do not have to coordinate purchases with the operator, and relieve employees. In the first quarter of 2023, X5’s personnel costs increased by 22.2% year-on-year to RUB 61.19 billion, the company said.

The law “On a unified biometric system” came into force on June 1, 2023. As follows from the document, all organizations that collect biometrics in commercial biometric systems must transfer this data to the EBS, which is operated by Center for Biometric Technologies JSC. According to SPARK-Interfax, the company belongs to Rostelecom through subsidiaries.

The Center for Biometric Technologies JSC told Kommersant that the legislation already allows the use of biometrics as a way to confirm the age of the buyer, this is equivalent to presenting a passport. The Mintsifra told Kommersant that they requested additional information from X5 on the projected process in order to evaluate it and make a conclusion.

The CEO of BIT, the developer of the Stop Shoplifter system, Mikhail Korablev says that there are components to introduce the technology of using biometrics in CSR, software updates will be required in terms of using certified EBS face recognition and integration with transactions. Magnit noted that any digital identification will increase the speed and efficiency of verification. In Lenta, Auchan, Metro, O’Key, Kommersant did not answer.

Mikhail Burmistrov, General Director of Infoline-Analytics, says that large retailers are increasing the number of CSR, including in the face of difficulties in attracting staff to work in stores. According to him, two classic cash registers can be replaced by four to six cash desks. In February, Pyaterochka noted that CSR accounts for about 40% of midpoint traffic. Magnit previously said that on average about 65% of customers in large format stores and 25–30% in convenience stores use CSR. And for hard discounters or alcohol markets, CSR is less applicable, Mr. Burmistrov believes. The Red & White network told Kommersant that they do not plan to introduce CSR yet.

But Russians seem to remain distrustful of the use of biometrics. According to the June poll of VTsIOM, 32% of respondents are negative about the delivery of biometrics, 27% of respondents are positive. According to an NtechLab survey, 13% of Russians would choose biometrics for payment, and 78% prefer bank cards. Consumers, NtechLab spokesman Alexander Thomas, are worried about the risks of data leakage and privacy violations.

Alina Savitskaya, Nikita Korolev

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