Credentials management company Jumio Inc. announced it has formed a network of bitcoin exchanges, wallets and ATM providers worldwide to smooth ID verification procedures and open easy transactions to a greater range of connected devices.
Its new Bitcoin Identity Security Open Network (BISON) includes BitAccess ATMs, SnapSwap, CoinMkt, Digital Currency Exchange of Texas, CoinRnr, Hashop.io, NoveltyLab and Bitnet Technologies as initial members.
Using Jumio’s ‘Netverify’ technology, users in the BISON ecosystem can simply hold their ID in front of a camera on any connected device to get verified and validated at the point of transaction. It also extracts the personal information on the ID and auto-populates the transaction form, doing all this in real-time.
The system can verify driver licences, passports and some other documents issued by over 100 countries using a bundle of automated techniques to detect manipulation. Suspect IDs are then referred to human experts for further examination.
Security for bitcoin businesses
Right now the buyer’s identify is used only in the relationship with the bitcoin business they’re using. Next summer, however, they will have the option to join a wider network whereby their ID details can be shared between different companies, obviating the need to complete separate identification and verification processes. Jumio gave bitcoin exchanges, with their often lengthy verification times, as the best example where this would be an advantage.
BISON client businesses will also have access to regularly updated data regarding success rates, failure rates, account openings, transaction failures and fraud attempts within the network, giving them a better idea who and what to watch out for. Jumio’s founder and CEO Daniel Mattes said:
“The vast majority of bitcoin users are honest and engaging in a range of legal transactions, but a small minority are not and that threatens the entire ecosystem especially during this formative period.”
“BISON is designed to minimize the problem by weeding out those who use false or manipulated IDs which is a strong indicator of intended fraud or other illegal activity.”
New world
Jumio is not a ‘bitcoin business’ per se, concerning itself mainly with verification procedures at all types of clients, including many in the online retail, government and traditional financial spheres. However it is also backed by venture capitalist firm Andreesen Horowitz, and many of Marc Andreesen’s recent bitcoin pronouncements have begun to catch on.
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It has also been working with a number of bitcoin businesses recently, and realized the need for an efficient and accurate way to verify identity in transactions using connected devices, like smartphones.
The new concept of ‘keystroke-free transactions’ seeks new ways that respect the form factor of mobile devices, Jumio says. Everything now is based on the desktop model, with keyboards and browser auto-fill.
Chief Marketing Officer Marc Barach echoed many of Andreesen’s bitcoin beliefs: that in its current form, bitcoin is like the internet in 1994.
That is, it’s still a mix of fringe players and experimental technology, which doesn’t always work nicely. The next phase, both have said, will demand new standards of professionalism and trust to reach the mainstream.
Barach added: “We didn’t actually pursue this sector, it sort of came to us. We saw a need to establish trust between bitcoin customers, and the wallets and exchanges they work with.”
By weeding out fraud in the form of fake or manipulated IDs, Barach said, the network strengthens the entire ecosystem. The main use case for BISON is obviously KYC (know your customer) rules that protect businesses from fraud as much as identify wrongdoers to the authorities.
“If you set up a process that makes it difficult for criminals to do business, they’ll go elsewhere and leave the space to legitimate activities. Criminals will go to that second tier of company, that doesn’t care about that stuff,” he continued.
He said Jumio had learned a few things working with bitcoin businesses, which involved improving security without compromising digital currency’s advantages.
“We discovered a couple of things: (1) Self-regulation is the way to go; (2) These companies have developed good processes to eliminate criminal activity; (3) Bitcoin is a hyper-efficient way to transact, and it’s all about keeping that efficiency.”
Privacy issues
Barach says he understands the concerns of users who might at first be reluctant to hand over their personal information to another company to share. But on the whole, trusting it to a secure system like BISON is still preferably to leaving your personal details spread over different businesses of varying sizes and security standards around the internet.
“If you want to sign up anywhere, say Coinbase or itBit etc, you have to give ID. What’s new is you now have the option to keep that info on a central place.”
“You’re leaving your personal information everywhere around the internet anyway. it’s something we’ve become used to, and Jumio doesn’t think merchants should be in the storage of payment and personal info business.”
“A lot of people go back to a small store they’d forgotten about and are surprised to discover they’re already logged in and payment details are on file. They think it’s convenient. In many ways, there’s a bias against the new – we think nothing of handing over our credit cards to a waiter in a restaurant, just because it’s established behaviour.”
Jumio now has offices and clients across the US and Europe, with Europe representing 40% of its business. It hopes to expand into Latin American and Asian markets over the next few years.
Founded in 2010 by Daniel Mattes, the Palo Alto company is backed by investors including Andreessen Horowitz and Citi Ventures. Facebook co-founder Eduardo Saverin has also been an investor since the early days and remains an active board member.