ID Check

With more commerce moving online and ultimately to mobile, tools for verifying identity and payment authenticity are of paramount importance. But equally important is the need to offer consumers a painless and frictionless checkout experience so as not to turn away potential sales. For many of the most prominent online merchants, the solution of choice in both these regards is Jumio, makers of the smartphone and webcam-based identity and payment card scanning solutions Netverify and Netswipe.

Today Jumio announced version 2.0 of its Netswipe platform, making payment card scanning significantly faster and adding the ability to read not only credit card numbers and expiration date, but also, for the first time, the cardholder’s name. With this update, the only thing customers need to enter manually today is the three-digit CVV number located on the back of the card.

“Scanning and processing is now nearly instantaneous,” says Jumio CMO Marc Barach. “We moved the image processing from our servers into the merchant app via our SDK and were able to dramatically improve the experience.” While it may be easy to discount the difficulty of reading cardholder names, Barach adds, “The text size used for the cardholder name is significantly smaller than that used for the numbers. Also, words and the way letters are arranged have significantly more variability than do numbers. This is a non-trivial advancement.”

Jumio has raised a total of $35.3 million from Andreessen Horowitz*, Citi Ventures, and Facebook co-founder Eduardo Saverin. The Palo Alto company has approximately 65 employees. Netswipe’s current customers include Travelocity, AirBnB, Ridejob, Wallaby, Western Union, and Fab., among dozens of others, and the technology supports Visa, MasterCard, Discover, American Express, JCB, Union Pay, and Diners Club cards.

It’s not just Netswipe that is receiving Jumio’s innovation treatment. The company also recently unveiled its new device-based, universal digital wallet platform called PORT at the Money2020 conference, which will be the first in the industry to incorporate its identity and payment card verification technology.

“The integrity of any payment is only as good as the verification technology that it’s built on,” Barach says. “No other digital wallet solution can offer merchants the level of certainty that PORT can about the authenticity of the user and the transaction.”

But as I wrote previously, there are caveats to this claim:

What the company cannot yet confirm is that the person holding the card is in fact its owner. This means that Jumio is able to guard against the far more common problem of stolen identities, but not the less prevalent one of stolen wallets. Absent some biometric scanning component, any other identity verification company will face the same limitations.

Rather than building a stand-alone, proprietary app, the company plans to offer on open platform and invite partner merchants to integrate their payment platforms. For example, PORT already integrates with Apple’s Passbook, and will do the same with other e-wallets and individual merchant apps beginning next year. As with Braintree’s Venmo, consumers will only need to enter their payment credentials once within the network of participating merchants, afterwhich they would be able to complete one-click purchases across the network – but with dramatically increased security relative to existing solution. Port will go live in the first quarter of 2014.

Digital wallets has been a tough category and none of the available solutions have achieved significant adoption to date. Barach theory is that this is because they only address half of the use case of a traditional wallet: payments. PORT, on the other hand, will address both payments and identity, making it the first solution to offer the real prospect of leaving home with just a smartphone, aka the Holy Grail.

The big challenge with this and any digital wallet solution will be achieving a level of penetration among both consumers and merchants to make it compelling for these constituencies to make it the accepted standard. Conceding for a minute that PORT may in fact have the best solution, at least at the moment, driving adoption at the consumer and local merchant level is non-trivial.

Jumio appears, wisely, to be doing everything in its power to weave itself into the fabric of the digital economy. Given the risks posed to both consumers and merchants transacting in this remote environment, this is a good thing. It’s critical that identity and payment integrity be held to the highest standard, and today, that means Netswipe and Netverify.

 (* Disclosure: Andreessen Horowitz partners Marc Andreessen, Jeff Jordan, and Chris Dixon are investors in PandoDaily.)

[Image via Ottawa Sun]

  1. Designed to increase revenue, reduce fraud, and streamline customer experiences, Jumio utilizes patent-pending computer vision technology to validate and facilitate transactions while providing unprecedented levels of consumer convenience and data security.