An Israeli company is promoting an unusual solution to the problem of authenticating credit cardholders online: a technology that would put a flat button on the face of a card, which users would hold up to their personal computer and press when they wanted to identify themselves at a Web site.
The button which the company, ComSense Technologies Ltd., calls the ComDot uses ultrasonic signals to send a sound code through the microphone in a PC to the server the person is trying to reach.
ComSense says its wireless system, which would require the installation of tiny batteries, push-buttons, and other circuitry on ordinary magnetic stripe cards, is a better alternative to smart cards, which have microprocessor chips installed in them. While smart cards authenticate transactions through the memory chip, the ComDot technology system does not require that people have smart card readers on their personal computers, though it does require them to have sound cards and microphones.
Ralph Browning, senior vice president of business development at ComSense which is based in Tel Aviv and has an office in New York says cards equipped with ComDot technology can not only send high-pitched beeps to Web sites, but can also play brief verbal messages to their owners, which makes them handy advertising and communications vehicles. The cards could emit a sound to acknowledge a transaction or to emphasize the cards brand, he said. In another handy feature, customers who point their cards at their computers and push the cards button can be instantly transported to the card issuers Web site without typing in a Web address.
When you add a battery, you have the ability to power other types of functionality, said Mr. Browning, a former senior vice president at MasterCard Internationals Mondex smart card subsidiary. That is limited only by the imagination.
The ComSense system strikes some observers as clever but farfetched, given that the U.S. card infrastructure seems to be migrating slowly toward the accommodation of chip cards, and adding batteries to plastic cards would only inject yet a different layer of expensive and unfamiliar technology.
But ComSense has attracted some endorsements that may help it as it peddles its technology to European and U.S. card issuers. Malcolm Williamson, the president and chief executive officer of Visa International, is nonexecutive chairman of the board. Investments have come in from high-profile executives from Intuit Inc. and Goldman Sachs Group. The management team includes people who have worked on smart card projects at major companies, such as Mr. Browning and Glenn Weiner, the senior vice president of corporate strategy, who was vice president of smart card technologies at American Express Co.
Mr. Browning said that ComDot technology could help U.S. banks win back customers who had been lured to the American Express Blue card, which was the first U.S. smart card product for the mass market.
My feeling is that card issuers will look at the number of premium customers that Amex has scooped up with Blue and they will wonder how they can win these customers back, Mr. Browning said. They will want not to match Blue, but to leapfrog it with something that achieves easy secure e-commerce and a product that is innovative and sexy.
Jim Sanger, chief technology officer and vice president of technology investments at DB eVentures, a venture capital arm of Deutsche Bank, said his firm has invested $5 million for an equity stake in ComSense and will consider offering the cards to its own card-issuing divisions.
DB eVentures wants to give senior managers exposure to ComDot, Mr. Sanger said.
While Mr. Sanger said he had expected that Deutsche Bank executives would be most impressed with the products security features, he said that the managers who have seen it had different reactions. Feedback from a number of divisions thought of it from a convenience standpoint, or in micropayment processes, he said.
Mr. Browning said ComSense has spoken with issuers in the United States, but had not yet signed a customer. He is emphasizing to U.S. issuers that the ComDot system does not require smart card readers, which Mr. Browning called an expense that card issuers would like to avoid. However, they do require that users have Internet-connected PCs with sound cards and microphones. Users must also download a small program from ComSenses Web site that makes the system work.
One smart card consultant was skeptical that consumers would be more likely to have microphones than smart card readers.
It just raises another infrastructure problem, said Jerome Svigals, director of the Smart Card Institute of Redwood City, Calif., a consulting firm. There are better answers, such as PIN codes or digital certificates, that dont require conversion infrastructure.
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