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Summary:

Card.io is announcing the launch of a private beta program for mobile developers who want to integrate its visual swipe technology into their apps, allowing people to enter in their credit card information by just taking a picture of their card.

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Though Square and others have popularized easy credit card data entry with card readers that plug into a mobile device, others are looking at capturing the same data with a smartphone camera. I wrote about how AisleBuyer introduced a card capture solution allowing merchants and businesses to process credit cards by just taking a picture of them. Now, a new startup called card.io is looking to bring that technology to mobile developers so they can enable their apps for easy credit card data entry.

Started by former Admob employees Mike Mettler and Josh Bleecher Snyder, card.io is announcing $1 million in seed funding, as well as the launch of a private beta program for mobile developers who want to integrate card.io’s visual swipe technology into their own apps. The SDK will allow developers to drop software into their apps that lets users quickly enter in credit card information by scanning cards with a phone camera. The technology works similarly to that from AisleBuyer, utilizing optical character recognition and machine learning to extract the numbers from the card.

Card.io doesn’t save the credit card data or the image. It just converts it securely with 128-bit SSL encryption and allows developers to use it within their existing payment processing systems. The company is initially hitting iOS developers working on e-commerce, local, ticketing, travel and daily deal apps, and has already lined up partnerships with MogoTix for event tickets, TaskRabbit for local services and SamaSource for donations.

CEO Mettler said card.io is not looking at in-store retail but believes there’s a big opportunity to enable faster checkouts for mobile commerce without the need for additional hardware. The key is to make transactions as frictionless as possible.

“People don’t want to type in their credit card information on their phone,” Mettler said. “Our theory is if we make that an easy process, usage will follow.”

The company is looking at charging per scan but is open to striking revenue sharing license agreements with developers. It has a pretty impressive list of investors, including Jeff Clavier and Charles Hudson of SoftTech VC, Manu Kumar of K9 Ventures, former PayPal vice president Alok Bhanot and AdMob founder Omar Hamoui.

I like the technology and think that it’s good tool for mobile developers, though we’ll have to see how cost effective it is. Removing the barrier of entering credit information is key for more transactions and less abandoned digital shopping carts. It’s one of the reasons why Apple has excelled with iTunes and the App Store, because it has that information stored already.

If other apps can offer a quick but still secure way to get that information entered, it should drive more sales. This might turn off some people who may not trust an app that requires taking a picture of their credit card. But people are already getting comfortable with the idea of depositing checks by taking a picture of them with their smartphones. If card.io can prove itself secure, I can see it having similar success, at least until we’re all storing our credentials on digital wallets.

  1. Ambrish Kochikar Thursday, June 23, 2011

    Innovative!

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  2. The real question is ‘can the merchant accepting the card this way receive lower card-present interchange fees or is the best they can do card-not-present rates?

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  3. Hi Ryan, I tend to agree, especially with the last sentence. Unfortunately digital wallets have been long promised but slow in coming. This would ease the pain in the meantime.

    Thanks, Parneet

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  4. Neat idea, but not ready for prime time. There are countless problems. Off the top of my head:
    – It doesn’t scan the back of the card, which will be necessary to see the security code. Without the code, the transaction won’t process.
    – Someone could take a photo of someone else’s card, print it, and scan it. Easy fraud.
    – I still have to enter my name, address, etc. That’s too much data entry on a phone.
    – Added merchant cost per use will be a deal killer. Card not present rates are already high enough.

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