Online Checkout Evolves — Pay by Holding Your Credit Card Up to Your Webcam

The Internet will need to see some ID, please. Online payment company Jumio has announced the launch of Netverify: an image recognition technology that allows merchants to remotely scan credit cards and IDs with a webcam or phone.

To use Netverify, shoppers hold up a credit card and a driver’s license to their cameras to verify their identification as they’re checking out. This online equivalent of asking a customer to show ID at the checkout stand is designed to help eliminate credit card fraud, and although the application can recognize and verify an image, no data is stored on the computer.

With less hardware than a traditional credit card swiper – and an even more mobile platform than a plug-in device like Square – Netverify can make an online transaction just as personal as a point of sale, but less expensive for the merchants.

What will this mean for the social media industry? While Jumio hasn’t announced any social applications for this technology, the company already has some very social backers, like Eduardo Saverin, co-founder of Facebook; and Peng T. Ong, founder of The company just raised $25.5 million in a round of Series B funding led by Andreessen Horowitz, another supporter of social media startups.

“Daniel and the Jumio team understand the challenges facing online merchants when it comes to battling credit card and identity fraud because they’re dyed-in-the-wool entrepreneurs themselves and they have encountered the problems that Jumio aims to solve,” said Scott Weiss, general partner of Andreessen Horowitz and Jumio’s new board member in a statement. “Jumio’s technology is a huge leap forward for online payments with potential to transform even more industries.”

In the real world, identity verification is limited to high-security and age-restricted areas. Most people are willing to flash a driver’s license to have a drink at a bar or to settle their tab, but if a department store tried carding people at the door, that might be a problem. How would this play out on a social media site? Spammers on Facebook are too mild of an inconvenience to warrant showing ID just to set up an account, and no one wants to be caught using their real names on Match. But things might change where money is involved.

A recent survey by Harris Interactive showed that 55 percent of consumers are not comfortable sharing their credit card information on social sites. Argyle found that only 17 percent of retailers feature products on their Facebook Pages at all, while only 4 percent enable checkouts.

If social profiles were similarly backed with proof of identification, identity fraud would be less of a problem. But the ramifications might fall somewhere between putting up an irritating red rope and, on the opposite end, making social media so invasive that it wouldn’t be worth it.  What do you think?

Image by Brisbane via Shutterstock.


Publish date: March 7, 2012 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT