How Wineries Can Solve an Age Old Problem Online

Posted on May 11, 2012 by Jodi Florence

In the news this past week was a story about a research study where underage people were recruited to buy wine, alcohol, beer and other adult beverages online from 100 popular websites in the industry.  Here are the results:

Of the orders, 45 were received, 28 were rejected after the delivery company tried to verify the buyer’s age and 11 were sent back when no one was home to receive them. Another 16 went awry for reasons like technical glitches unrelated to age.  While the researchers allowed buyers to fabricate a birth date on an online purchase form, they had to show their real identification if they were asked for it. In many cases, the official document didn’t prevent the purchase, the study found.

Let’s break this down as I see it.  84 orders were approved to ship by the website. Ouch.  Do these websites even have an age verification system in place? Are they using the honesty policy?  Are they only doing credit card verification?

While the full details of the study are gated at the Archives of Pediatrics & Adolescent Medicine. I did find some more information on the results in the abstract:

Of the 100 orders placed by the underage buyers, 45% were successfully received; 28% were rejected as the result of age verification. Most vendors (59%) used weak, if any, age verification at the point of order, and, of 45 successful orders, 23 (51%) used none. Age verification at delivery was inconsistently conducted and, when attempted, failed about half of the time.

There are different levels of age verification available for retailers.  Using a true identity and age verification solution does work.  Based on the results above the problem would appear to be that only 28% of the retailers are using one.

The battle of who shoulders the burden of proof between the retailers and delivery companies is a tired excuse for this industry.  We are all responsible for protecting our kids.  Meaning e-commerce sites need to implement reliable, strong, age verification solutions; and delivery truck driver’s need to pay more attention to the recipients of age related packages.

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Identify Yourself as an Organ Donor On Facebook

Posted on May 3, 2012 by John Dancu

I’m a minority. I’m among the 43% of the population registered as an organ donor. I’ve been an organ donor ever since I started driving many, many years ago.

I was excited to hear Facebook’s announcement on Tuesday about sharing your organ donation status on the popular social network. This kind of exposure and support will hopefully mean I’ll change to a majority status.

I became an organ donor at my local DMV. Since then the opportunities for registering to be an organ donor have expanded. In fact, some time back we blogged about our work in the organ donation community.   We are helping both the New England Organ Bank, the oldest organ donation organization in the country, and the Nevada Organ Bank facilitate more organ donor registrants.

With the increase of identity theft, many people often associate identity verification with stopping fraud. Yes, this is a benefit of using an automated identity verification service. But it’s just one piece of the puzzle. The real benefit is being able to process more approvals…transactions….business.
When increasing the rate of business means allowing more people to register as organ donors and save lives, that’s pretty cool.

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Best 2 1/2 minutes you’ll spend learning about identity verification

Posted on April 30, 2012 by Jodi Florence

Still not quite sure what identity verification is?  We recently put together a short, animated video to explain it.


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2020 Mobile Vision

Posted on April 20, 2012 by John Dancu

Mobile has long been a talked about strategy for the financial industry.   But finally it is moving beyond simple online banking tasks of just being able to check account balances or receive mobile account alerts to providing sticky applications that will change a consumer’s lifestyle.   Cases in point are the Google Wallet and Pay by Square.  I have both.  They are both fabulous and easy to use.  I wish more merchants would embrace NFC (Near Field Communications) technology so that I can ditch my “real” wallet. Based on the results of a recent survey conducted by Pew Internet & American Life Project, a lot of people share my sentiment.

Nearly two out of three respondents to the survey (65%) told the Pew Internet & American Life Project that they think most people will have fully adopted the “mobile wallet” as their day-to-day means of paying by 2020….

…By 2020, most people will have embraced and fully adopted the use of smart-device swiping for purchases they make, nearly eliminating the need for cash or credit cards. People will come to trust and rely on personal hardware and software for handling monetary transactions over the Internet and in stores. Cash and credit cards will have mostly disappeared from many of the transactions that occur in advanced countries.

The mobile payments market gained a lot of traction last year thanks to Square and other mobile merchant acquirers like NA Bankcard giving a lower cost alternative for merchants to accept credit card payments.  This is broadening consumer awareness about mobile apps and uses for their smart phones and tablets.

All the activity around mobile and payments is really heating up with the big brands.  Here’s a short summary list to catch you up to date:

  • Google acquired TxVia a payments processor to complement its Google Wallet
  • There is speculation of iPhone 5 supporting NFC
  • eBay has promised to “define the future of money” by using its PayPal service to replace credit cards and cash by making smartphones into “mobile wallets”
  • PayPal expanded its roll out of mobile payments capabilities in Home Depot to 2,000 stores. Consumers pay by giving their phone number and pin code to a cashier.
  • PayPal has also launched PayPal Here which is a credit card reader that competes with Square and also includes an application that uses the phone´s camera for processing credit cards and checks
  • Square announced it is now processing $4 billion in transactions each year. The company also released an iPad app called the Square Register, which is designed to replace existing retail sales registers.  The company raised $100M in cash last year on a $1B valuation and is now looking to raise $250 million on a $4 billion valuation.
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Top 6 Things We Learned at the Prepaid Expo

Posted on March 15, 2012 by Jodi Florence

The Prepaid Expo wrapped up yesterday and what a show!  From the sound of it, everyone we talked to this week is hopefully going home a winner – at least when it comes to industry knowledge.  While what happens in Vegas usually stays in Vegas, I couldn’t help but share the Top 6 Things We Learned:

6. Prepaid is still rapidly growing.  People are expanding their offerings and new programs are being launched every day.  There are more new uses for prepaid cards every day.

5.  Fraud is still a big concern.  Identity verification is helping to meet compliance but it’s also a good tool for preventing fraud.

4. Mobile is hot. Even though mobile is emerging, it’s already gaining a lot of interest as evident in the Google Wallet program winning in the category of Best Innovation.

3.  Commercial Banks are going to have to figure out how to get a piece of the prepaid revenue pie.

2.  There is still a lot of interest and anxiety about regulations.

1.  TxVia and Visa really know how to throw a great party!

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Highlights for Day 2 at the Prepaid Expo

Posted on March 13, 2012 by Jodi Florence

As promised, we have more big news related to the Prepaid Expo #ppexpo going on this week.  Today we made a formal announcement about our work with UniRush, the marketing company behind Russell Simmon’s Prepaid Visa Rush Card.   And the timing was even more perfect with  PYMNTS.com featuring Rush Card and why payments players ought to pay attention to UniRush.

Today is sure to be slammed packed but if you are there and have a chance, here are some places you can catch up with us:

  • Test Drive an Expert–3:45-4:45 p.m. – Our CEO John Dancu has been selected to be a part of the PrePaid Expo’s Test Drive an Expert series.  You can meet with John today and find out everything you need to know about identity and compliance.
  • Innovation Showcase – 4:35 -4:50 p.m. – Compliance & Revenue: Bridging the Divide How much do you know about the different CIP rules issuing banks have and the impact to your programs? Catch this 15 minute presentation with Chris Luttrell, IDology’s VP of Product & Customer Service in the Expo Hall to see how IDology’s identity verification solutions are helping program manager’s bridge the divide between CIP compliance and revenue.
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Compliance March Madness: PrePaid Card Expo Hits Vegas

Posted on March 12, 2012 by Jodi Florence

The 7th annual prepaid card exposition opens up today.  Let the understanding compliance regulations madness begin.  With all the new regulations for both stored value card and prepaid cards, compliance is definitely a hot topic this year.   Just a few weeks ago, we made an announcement about our partnership with Card Compliant so I suspect there will be more interest from stored value card players, especially in light of the new CIP compliance regulations they must follow.

We kicked off the show today with some more prepaid related news.  In case you missed it, we announced why Plastyc, which provides affordable deposit, payment and saving financial services for people with limited access to, or distrust in large banks, is using IDology.

And we have more news to come tomorrow!   If, like me, you aren’t in Vegas and want to follow what’s happening, you can.  I plan on watching the latest news from the show at the prepaid media room and will track the live updates using hashtag #ppexpo on twitter.

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Seeing REDfin in Action

Posted on February 14, 2012 by Jodi Florence

One common misconception about identity verification is that only retailers need it.  I guess this misconception comes from people mostly associating fraud with stolen credit cards and stolen goods.  Yes, online commerce does have a need for identity verification related to high end purchases.  But there are many other use cases and industries that need it.

Just today we announced a use case that is really unique.  Redfin, the first online brokerage, is using identity verification to improve the process of buying and selling a home.  This is a great example of an industry traditionally tied to the bricks and mortar identity verification process evolving to a virtual world.

Here is a little bit about what Redfin is doing:

Redfin is the only major search site to feature listings direct from broker databases as well as for-sale-by-owner and foreclosure properties from across the Internet. Before using IDology, Redfin’s process of verifying the identity of potential customers was cumbersome both for clients and agents. Because Redfin agents handle every facet of a transaction, including tours, pricing analyses, negotiations, inspections and closings, the company wanted to find an easy way for customers to validate who they said they were that would help streamline the process for their agents while also eliminating fraud.

“Our previous identity verification method required customers to upload, email or fax their driver’s license, passport, or military ID. This caused many people to bail out and not go through the next step of meeting with an agent. We were looking for a more efficient and less time-consuming way for our customers to verify their identity,” said Bryan Selner, Vice President of Products at Redfin.

Now, instead of submitting proof of identity via email or fax when scheduling a home tour, clients are presented with a brief multiple-choice quiz that is dynamically generated in real-time by IDology’s ExpectID IQ product. IDology’s ExpectID IQ solution delivers out-of-wallet questions based on a person’s history which are designed so that only the actual person of the claimed identity will know the answer. This new process protects Redfin agents and ensures home tours are being scheduled with real, legitimate people.

“An important aspect of our business is when our agents meet with clients in-person and onsite to tour a home. It was really important for us to find an authentication solution like IDology’s. To help keep our agents safe, we need to know that they are meeting with people who are who they say they are. Automating this process needed to happen in a way that wasn’t difficult for our clients, or off-putting.”

Pretty cool out-of-the-box thinking.  What about your business?  How does it need to evolve?

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Tic-Tax-Dough

Posted on February 10, 2012 by Jodi Florence

By now, the W2s and 1099 reports for 2011 are all out.   With April 15th just shy of 2 months away, tax payers are in full swing preparing their taxes and filing for refunds.

How are you getting your refund? If you are one of the many Americans who use a tax preparation services company (Liberty Tax, HR Block etc.) you might have the option to walk away with your expected refund on a prepaid card and not wait for your return.  Despite some of the bad press surrounding prepaid cards, this payment instrument has grown faster than any prior new payment method.  This year alone prepaid card sales are expected to top $522 billion according to Mercator Advisory Group in Boston.

Getting tax refunds on a prepaid card seems like a great alternative for tax payers who want instant “cash in hand” so to speak and don’t want to wait on the IRS to mail (or electronically deposit) a check.  Better yet, this method is a good way to reduce the chances of falling victim to identity theft from stolen tax refund checks.  In late January, the IRS and Justice Department conducted a national sweep; arresting 105 people in 23 states involved in identity theft and taxpayer refunds.

It’s not just check stealers and local identity thieves taking advantage of tax season; business owners are being targeted too in phishing attempts.  Case in point:

So beware.  The Government is not the only target for Tax fraud.  It’s prevalent everywhere.

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Age Verification Front & Center in 2012

Posted on January 12, 2012 by Jodi Florence

It’s been some time since we’ve talked about age verification, but I assure you it’s still a hot topic in the market, especially for social networks and gaming (as in lotteries and sports betting) industries.

Let’s take a look at what is going on.

Social Networks are waiting to see how the rules and regulations for COPPA will play out.  This past September, the FTC proposed amendments to COPPA to help “create a safer, more secure online experience for children” as a response to technological changes in the market, including mobile technologies.  The FTC was soliciting public comment on their proposed changes through November.  So one might conclude that at some point this year the FTC will announce amendments to the COPPA rule that will affect any website or social network dealing with minors.

How does this impact age verification vendors?  Well, that depends on the verification tool you are using.  As for IDology’s age verification solution – the ruling has no direct impact on our solution per se, since we’ve been pitching using age and identity verification to verify parents from way back when MySpace was a synonym for social networking (see our member statement response to the Internet Safety Technical Task Force.)  But it will drive more interest from Internet properties who want to find a way to obtain verifiable parental consent.

The other hot area related to age verification is the gaming industry.  In late December, the US Department of Justice released a new opinion on the Wire Act clarifying that the law refers to only prohibiting online gambling on sporting events or contests, and not the ability to sell online lottery tickets to adults.  This ruling also opens the doors for intrastate poker to become a reality in the United States because the new opinion is that Wire Act only focuses on sports betting, not poker or casino games.  The new ruling also helps to further support the District of Columbia’s efforts to offer online poker to its residents, which has been delayed since September.  (See more information on this gaming topic)

Clearly age verification plays a big part in what is happening in these industries.   Although really the underlying issue is more about identity because you have to know who someone is before you can verify their age.  This is why I often use the words “identity and age verification” together.  While you can have identity verification without an age component, you cannot have an age component without identity.  Think about it.  How often do we hear people incorporating age as a part of describing someone’s identity?  Just a quick glance at any news article, biography, or obituary will prove my point….

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