March 6, 2012 at 10:48 AM ET
A patent-pending technology turns your webcam into an instant ID reader, which its makers say is a good thing if you don't want to fax in your ID when a business asks for verification that you are who you say you are. But it could also be a bad thing if you don't want the info on that ID stored somewhere "for future reference."
Jumio, a company that last summer introduced Netswipe, a way to use webcams as instant credit card readers, has now announced Netverify, which incorporates the same technology into using cameras on laptops, desktops, tablets and mobile phones for instant ID captures.
For consumers, this could be a convenience, if you're applying for a loan or trying to rent/buy a place and and those establishments need proof of ID to push the transaction through -- and you don't want to go to the trouble of scanning or faxing your ID over. Or, if a fraud claim has been filed and you need to prove your identity to a vendor. All you do is hold up your card to your camera and the software does the rest. The company that is rolling out this new technology is capitalizing on merchants in Europe who have had to deal with fraud and now they're attracting the attention of American businesses.
But is this the best way -- that is, the safest way -- to get that information to those vendors, when you can't do it in person?
According to Jumio's Markus Rumler, "Nobody is able to access the scans and the handling of the scans, [which] undergo the strictest PCI compliance procedures. The actual scanning process is no different from having to show an ID in a shop."
Actually, it is very different, as most stores I know don't photocopy or scan IDs/driver's licenses, (much less verify they're the real deal), and store clerks don't hold onto the cards for more than a couple of seconds. And in some states, like California, it's illegal for merchants to record any personal information other than what is on the front of the credit card. (Thanks, Privacy Rights Clearinghouse for the California Civil Code citing.)
Rumler tries to reaffirm the safety of the technology:
This depends on the customer and if there is a valid investigation in progress for fraudulent activity. If a Netverify customer is given permission to store these data by official departments, Jumio can give access to data...If a merchant is granted access to data, the full data won’t be given out, the merchants will only get the relevant information snippets. With fraud and ID theft on the rise, it is common to copy IDs when customers pay for a bigger purchase or have cash paid out. Netverify brings this security standard to the online world.
The company targets merchants with its pitch:
Any kind of online merchant would benefit from Netverify, merchants in travel, ecommerce, gaming and gambling. If a payment is suspicious, merchants will have to communicate this with the bank which will then check with the end consumer. Some merchants request a copy of the ID if the purchase is very high or unusual. Nowadays, ID checks are common procedures in the off and online world. Up until now, having to fax a copy of the ID was the only way to go through an ID check without having to be present. Fraud checks are always conducted in the background by the merchant’s fraud management team, end consumers are usually not aware of the work that goes into fraud checks – unless they have to send a copy of an ID as a last resort. Ultimately, fraud checks are very costly for the merchant and might delay the payment and delivery of the purchase.
Jumio released Netverify to its 1,500 clients already using Netswipe, who are mostly based in Europe, where, according to a company spokesperson, it will assist "high risk merchants which are exposed to a lot of fraud, such as gambling and gaming merchants. With the release of Netverify, we have had increased interest in the US as well."