Combining barcode technology and  a smartphone app, along with a photo-security feature, Think Computer Corporation’s FaceCash mobile payment system lets consumers pay for items at the point of sale, with a mobile phone.

The company plans to develop an integrated payment and accounting network called ThinkLink, with FaceCash as the first component of that system to launch. FaceCash operates as a simple debit from a consumer’s pre-funded account.

Because many merchants may already have the existing barcode hardware, along with a low transaction fee of 1.5%, the system is likely to be a low-cost implementation, though they may have some tough competition from the big existing player’s like Visa or MasterCard. The company’s success in this area hinges on merchant adoption.

However, many small merchants are likely to be tempted by the use of existing barcode hardware and lower rates, as well as a desire to move away from the established credit card companies and their big corporate prices and reputations. In concept, it’s a lot of things that your larger and financial companies don’t offer, and FaceCash may leapfrog those industries, if done right.

FaceCash uses simple barcode technology to facilitate quick  payment transactions in restaurants, clothing stores, and other retail shops. The system offers  the ability to record multiple account numbers directly within the FaceCash application. Buyers also have access to a good amount of  detail about their purchases because an  electronic receipt is automatically generated each time a FaceCash transaction takes place.

A particularly nice feature that is not available in most other mobile transaction system is that FaceCash records line item transaction data–so buyers get item details about their purchases–not just the total amount spent.

The application can be used with any participating merchant, so that it is no longer necessary to download a different mobile application for each vendor. Unlike other mobile payment systems, buyers do not need cases, stickers, dongles, attachments, or any other kind of extra hardware.

On the merchant side, there  is one flat rate for processing a FaceCash transaction: 1.5%. This rate represents a savings for most sellers of over 50% compared to existing electronic payment solutions, as aggregate credit card processing fees tend to average 3.2% per transaction (or higher) for most small merchants, with some card processors charging as much as 5% per transaction. Set up costs are also relatively low since FaceCash just requires a computer with internet access and an inexpensive barcode scanner at the point of sale, which many sellers already own. For those that need hardware, all of the necessary equipment is available for purchase.

FaceCash works on debit basis. Consumers pre-fund their FaceCash accounts by transferring money from a checking or savings account, and can then debit their available balance by making purchases. FaceCash gets its name from the patent-pending security technology built into the system, which relies on an image of the buyer’s face to positively verify identity. Whenever a FaceCash purchase is made, the buyer’s face appears on the seller’s web-based point of sale system. The first time a buyer makes a purchase, the seller confirms that the photograph is accurate using the buyer’s driver’s license. A number of other security measures are built into the system.

Free FaceCash native applications are available for iPhone, Android and BlackBerry phones. Those with other types of phones can still use FaceCash through the mobile web client, and those with no phones at all can even use FaceCash via a paper wallet card generated during the sign up process, much like a printable boarding pass.

More info: FaceCash