A new alternative for online payments
Isabelle Vachon - SISTech Bulletin - CEFRIO - February 28th, 2003
Last week, credit card giants VISA and MasterCard were hit with their biggest fraud scam yet. By pirating the computer system of a company that processes transactions for merchants, hackers were able to obtain close to eight million credit card numbers. Not good news for the 63% of Quebec adults who, in 2002, felt it was either fairly or totally unsafe to make credit card purchases on the Internet . However, a new online payment solution, developed by the Quebec company Othentik Technologies, could put an end to such security concerns.
The HyperPaymentTM formula is simple: payer authentication and payment authorization are handled by the consumer's financial institution-not by a third party's computer system. Payments are made through a portal that allows funds to be directly withdrawn from the customer's online bank account. There will be a variety of payment options- from debit to credit card-through the customer's banking service. Until now, only recurrent bills with fixed numbers (e.g. from Hydro-Québec or Bell) could be paid online. But with HyperPaymentä, all bills can be sent by merchants and government agencies to the customer's financial institution and settled via the latter's online account. Since the transaction is direct, consumers don't have to disclose their credit card numbers on the Internet.
The new technology is much safer, because it requires consumers to identify themselves with their bank account username and password in order to pay a bill. The procedure will significantly reduce the possibility of fraud, and no doubt allay the fears of jittery online customers.
Othentik Technologies is currently working with the Canadian Payments Association (CPA) on a draft policy framework for remotely initiated one-time payments. Patented in some twenty industrialized nations, the solution should be available in the near future. Othentik Technologies already has prestigious partners such as Copernic and Dans un jardin, and is currently meeting with a number of organizations in the banking, technology and retail sectors. Keep a close eye on this homegrown initiative!
Isabelle Vachon, Business Intelligence Consultant/Analyst
http://www.cefrio.qc.ca/nouvelles.cfm?Id_actualite=416
Sources :
Canadian Payments Association, Draft Framework for Remotely Initiated One-time Payments, 9 pages.
CEFRIO and Léger Marketing, NETendances 2002 : Utilisation d'Internet au Québec(Internet use in Quebec), brochure.
Reuters, « FBI investigates credit card kacking 'epidemic' », ZDNet News, February 20, 2003.
Othentik Technologies, HyperPaiementmc revolutionizing online payment!, 2003.
