Thereâ€™s been a lot of buzz lately about mobile payments technologies like Square, a little white box that plugs into an iPhone and essentially turns it into a credit card processing tool. Small business owners and entrepreneurs like these technologies because it lets them bypass the high costs of processing credit card payments through traditional payment networks. Now, a Silicon Valley tech firm named Jumio has rolled out a program called Netswipe that lets anyone with a webcam â€” including bloggers, thanks to a new WordPress plug-in that was just introduced â€” accept credit cards.
The web-based version of Netswipe officially made its debut earlier this month. Following the release of the WordPress plug-in this week, Jumio founder Daniel Mattes says apps for both the iPhone and Android platforms will be released in the coming weeks. With Netswipe, the merchant uses a computerâ€™s webcam (or the built-in camera in the smartphone version) to â€œreadâ€ a customerâ€™s credit card, using sophisticated technology that can perceive details like the raised lettering on the card to authenticate the purchase.
(MORE: The Perils of Mobile Payments)
The bulk of credit card fraud today takes place when a thief gets an account number but not the card itself and makes purchases online with the pilfered digits. Mattes says Netswipe eliminates that risk by giving the recipient proof that the card is actually held by the cardholder. (It would also pick up if the name on the card didnâ€™t match the person holding it up for the webcam â€” say, if a woman is holding up a card that reads â€œJohn Doe.â€)
For small businesses, Mattes says heâ€™ll charge 2.75 percent of the cost for processing the transaction. While this is steeper than the average processing cost for credit or debit transactions, the merchant doesnâ€™t also have to pay monthly fees, as they do to ordinary network processors. Mattes says he hopes to sell just the authentication portion of Netswipe to bigger companies that already have an e-commerce set-up but want an added degree of security. â€œAs a merchant in the Internet world, Â you never know if they have the card or not or if theyâ€™re using a stolen one,â€ he says.
Article source: http://moneyland.time.com/2011/08/26/new-tool-uses-webcams-to-read-credit-cards/