With Jumio, the Webcam Becomes the Card Reader

by Mercator Advisory Group 0

Transaction and payment origination technology is experiencing a flowering of sorts. While the magstripe is (very) slowly exiting the POS stage, clever alternatives that make use of the mobile handset – like Naratte’s Zoosh – are showing up to compete against NFC. For e-commerce, of course, it’s just the name and numbers on the card that matter –and the data entry step is fraught with sales friction, errors, (and worse) risk, as malware keyloggers steal those payment credentials.

Jumio has launched a set of services anchored by its video-based origination technique. The consumer holds the front of her credit card to the webcam and Jumio’s system decodes the videostream to extract the name, account number, and expiration date. On a popup screen, the customer clicks on a virtual keypad to enter the CVV2 code.

Jumio’s processing offer that includes the Netswipe capability takes a flat 2.75 percent of the transaction, mimicking Square’s fee structure. While the Jumio’s service has no fraud track record to argue for a change at least from an imaging point of view, these are card present transactions. Only time and exceptional execution will demonstrate if this method’s security can drive e-commerce fraud rates towards card present rates.

Today, Jumio is finally unveiling Netswipe, a technology solution that enables e-commerce site owners and Internet retailers to process online and mobile payments by having customers ‘swipe’ their credit cards using virtually any webcam. Think of it as Square for the Web, without the need to purchase and install additional hardware. Watch the video below to see how it works, in a nutshell.

Jumio is introducing three products for online merchants: Netswipe Start, Netswipe Scanning and Netswipe Processing. Additional products, including a mobile solution, will be released later this year.

The idea of processing digital payments by scanning credit card information isn’t entirely new, we should note. Last month, for example, saw the launch of Card.io, a startup that is developing mobile applications also capable of scanning credit cards using smartphone cameras, and some other applications like AisleBuyer include similar features.

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