Jumio Sees New Online Payments Opportunity Through the Webcam Lens
Jumio, a payments company backed by Eduardo Saverin, who still owns a substantial stake in the company as one of Facebook’s original co-founders, is finally unveiling its product today. Called Netswipe, it turns an off-the-shelf webcam into a credit card reader.
Saverin, who also helped inform the plot of Aaron Sorkin’s “The Social Network,” invested in the company’s $6.5 million round back in March. He will also oversee the company’s entrance into the Asian market, although today the company is launching in the U.S. and Europe.
The goal of the Mountain View, Calif.-based company is to make entering a user’s credit card information into an online form a snap, while also making it much more secure, according to Jumio Founder and CEO Daniel Mattes (pictured right).
It works like this: To purchase something online, consumers hold their credit card in front of their webcam. The card is quickly recognized and verified without taking a picture or storing the data on the computer. The information is then entered in the correct format.
The technology will soon also be adapted for mobile phones so merchants can accept payments in person by using the phone’s camera.
Mattes said it solves two pain points — usability and security.
During trials, he said Netswipe was able to decrease the number of consumers who abandoned their purchases at checkout to 21 percent from slightly more than half. It can also cut down on fraud, because consumers must have the actual card in hand.
“It’s almost impossible to make and use fake cards. We can detect if the type is embossed or if there is a hologram,” Mattes said. “We spent a lot of time and money and effort on accuracy.”
With so many advances taking place in the payments space right now, the technology is already similar to a couple of solutions on the market.
First, there’s Square, the well-backed San Francisco start-up, which has created a card reader that plugs into either a cellphone or a tablet, so that payments can be accepted cheaply and easily in person. Second is Card.io, which captures payment data by holding a credit card up to a phone’s camera to automatically read the card information and enter the appropriate data.
Mattes said Jumio is “like Square for online,” although Jumio will also soon be coming out with a mobile version for making in-person payments.
Jumio will have three products initially, which will let merchants decide how comprehensive a payment network they want. If merchants only want to use the scanning technology via the webcam, it costs 15 cents a scan; for more comprehensive services, smaller merchants will pay a flat rate of 2.75 percent per transaction with no set-up or monthly fees.
So far, Mattes said Jumio has five merchants signed up, but he wasn’t willing to name them at this time.