Can Video Kill the Credit-Card Form?
The days of tediously having to punch in credit-card details whenever you make an online purchase may be numbered, thanks to a new payment system that turns any webcam into a credit-card reader.
Created by San Mateo, California-based Jumio, the new system, called Netswipe, not only makes online transactions simpler, but also improves security, says company CEO Daniel Mattes. The company’s management team includes Facebook cofounder Eduardo Saverin.
Netswipe prompts a customer to hold up his credit card to his webcam. An on-screen video feed guides the customer to hold it within a template so it can capture the details. “It takes about a quarter of a second to read,” says Mattes. To complete the transaction, the customer types in the three-digit verification number on the back of the card.
For security reasons, Jumio does not store an image of a user’s credit card, or the credit-card details.
Mattes says Jumio has spent the last two years developing the algorithms and secure video streaming technology that make this possible. The company has worked with multiple universities and computer vision institutes and has accrued more than a million training samples to ensure its card reading and verification is fast and accurate.
Steven Murdoch, a computer security researcher at Cambridge University, says the system could be more convenient, but adds: “It has some issues, too, though, in that someone with a picture of your card might be able to use it as a counterfeit card.”
Mattes says the system is designed to make this near impossible. “Jumio’s technology analyzes credit cards to determine whether they’re plastic and not paper,” he says. This involves scanning the numbers and letters on the card to determine whether they’re properly embossed, and checking card-specific features such as holograms.
Five large online merchants are preparing to implement Netswipe, Mattes says, and smaller companies can sign up to use it. “Smaller merchants simply need to embed a single line of code on their e-commerce website to offer their clients the option to pay with Netswipe,” says Mattes. A mobile app version will be available in the next few months.
A number of other startups hope to shake up the payment industry. For example, Square has developed a small magnetic credit-card reader that plugs into the audio jack of an iPhone, iPad, or Android device. Not requiring the merchant to pay for extra hardware could be a significant advantage for Netswipe, says Murdoch, but he adds that, like Square, “one of the most important factors in whether Jumio succeeds is what deal they can negotiate with the banks which process the merchant side of the transactions.”
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