"It's Square without hardware." That's how Jumio CEO Daniel Mattes describes his new credit card processing system, which uses cameras on consumer devices to read credit card info and to verify the authenticity and presence of the actual card itself.
In addition to saving users time (they don't have to type in credit card number if they're checking out at a site that uses Jumio), Mattes also says his system prevents against fraud: It can tell if the card the software is looking at is real plastic, if the numbers are embossed, even if the hologram on a card is real. Jumio, he says, destroys the criminal model of stealing credit card numbers. Now the bad guys need to have the cards themselves. Or a technological solution to fake out a webcam.
Sending the encrypted video stream also foils keyloggers.
In the future, Jumio might also be able to authorize credit transactions against additional tokens, like driver's licenses. It may eventually even verify against faces.
The service currently works through a Flash-based app that access a computer's Webcam. A mobile version is forthcoming, Mattes says.
There's no question that being able to hold up a credit card to a camera is easier than having to type in numbers. It's also more secure, although not absolutely so.
Jumio improves the convenience and security of the credit card system and has the big advantage of requiring no major infrastructure or behavioral change by consumers or credit card companies. But I would argue that the whole credit card concept is antiquated and has to go. Just ask yourself: if you were designing a new consumer transaction system today, would you base it on static, human-readable numbers engraved on physical tokens? Technologies like Jumio can plaster over the flaws in this ancient architecture--and profit greatly in the process--but really it's time for a new way to grant access to, and prevent fraud of, financial accounts.
I leave that as an exercise for the reader.
To stimulate your thinking, see.