Handwave: Amazon Palm Payment Alternative for European Retailers

The Rise of Contactless Palm Recognition

The concept of payment via a simple hand gesture is no longer confined to the realm of science fiction. Amazon One, a contactless palm recognition service, has already facilitated over 8 million transactions, as reported by the company itself.

However, deployment has largely been within Amazon’s ecosystem – its own stores and over 500 Whole Foods Market locations across the U.S. – with limited adoption by third-party retailers, numbering only around 150.

New Players Enter the Biometric Payment Arena

Fintech startups, such as Handwave from Latvia, are now entering this burgeoning field. Their aim is to offer independent retailers a comparable solution for expedited checkout processes, building upon the groundwork laid by Amazon in popularizing biometric payment methods in Western markets.

Notably, China is already experiencing significant adoption of biometric palm payments, with Tencent actively promoting its Weixin Palm Pay service for widespread use.

How Palm Scanning Technology Works

Similar to Apple’s Face ID, palm scanning relies on more than just a static image. The technology analyzes unique palm vein patterns and simultaneously confirms the physical presence of the user as their hand is held near the scanner.

This method provides a secure means for contactless payments and extends to broader identity verification applications. Companies like Keyo are also leveraging this technology for secure building access and other security-focused uses.

Handwave’s Focus on Retail

Handwave is specifically concentrating its efforts on the retail sector. Recognizing the need for a tangible offering, the Latvian startup has developed its own dedicated hardware and software solutions.

After three years of development, Handwave is now preparing for initial market trials, deploying its palm-scanning devices in select retail environments.

Cost-Effective and Customer-Friendly Checkout

Merchants utilizing Handwave’s technology will be subject to a transaction fee, which the company asserts will be competitive with, or even lower than, existing payment processing fees.

Faster and more affordable checkouts are projected to reduce operational costs. Crucially, the solution is designed to enhance the customer experience, eliminating the need for cards, mobile apps, fingerprint scanners, or facial recognition – even for age verification and loyalty program integration.

Experienced Leadership and Strategic Partnerships

Handwave’s co-founders, Janis Stirna (CEO) and Sandis Osmanis-Usmanis, bring extensive experience from Worldline, a leading global payment provider.

Despite this background, the team is committed to fostering a broad ecosystem of collaboration. “Our plan is to collaborate with any financial institution or acquiring bank,” Stirna explained to TechCrunch.

Securing Key Alliances

To date, Handwave has established partnerships with several major financial institutions, particularly within Europe. A recent agreement with Visa, signed this summer, has the potential to accelerate the deployment of Handwave’s solution across various countries, according to Oskars Laksevics, the company’s chief revenue officer.

While the U.S. market remains a target, Laksevics believes that initiating operations within the European Union – “the strictest market in the world” – will allow Handwave to demonstrate robust compliance before expanding its reach.

Maintaining a Competitive Edge

Positioning itself as an independent European entity could provide Handwave with a strategic advantage should Amazon decide to aggressively market Amazon One to third parties, or if JP Morgan expands its own palm payment initiatives.

Furthermore, the startup emphasizes its competitive pricing, having developed its own hardware and algorithms to reduce costs, as highlighted by Stirna.

Bootstrapped Growth and Funding

Handwave’s base of operations in Riga has facilitated efficient operation with limited capital. The company’s research and development efforts were initially funded through bootstrapping, a $780,000 angel investment, and $267,000 in non-equity funding.

This non-equity funding was sourced from an EU-funded cybersecurity grant, as well as support from Latvia’s LIAA Business Incubator and the EU-backed accelerator Ready2Scale.

Recent Seed Funding Round

As Handwave prepares for its initial pilots and regulatory certifications, it has secured $4.2 million in seed funding. This round was led by Vilnius-based VC firm Practica Capital, with participation from FirstPick and Outlast Fund (both from Lithuania), and Inovo.vc, a Polish VC firm with a presence in the Baltics.

The Baltic States as a Fintech Hub

The Baltic states have emerged as a prominent fintech hub, offering access to a skilled scientific workforce that is more attainable for startups like Handwave compared to Silicon Valley. This includes a strong pool of AI engineers.

“In the Baltics, there are not a lot of companies where you can get that extreme level of technical challenge to resolve,” Stirna noted.

A Vision for the Future of Payments

Oskars Laksevics, formerly a senior marketing executive at Luminor Bank (where Stirna also worked), expressed his conviction in Handwave’s potential. “I left a very well-paid corporate job to join this one, and I truly believe that we are building the next big global payment platform,” he stated.

Looking Ahead

Handwave appears well-positioned to advance its technology and gain market traction. However, the ultimate success of biometric palm payments and Handwave’s role in shaping that future remains to be seen.