While online gaming operators struggle to find alternative payment solutions that work for banks, consumers and operators, one software company is venturing into the industry because it feels it has the answers to a lot of operators' concerns.
The company, Safewww Inc., made a splash with its initial agreement last week. The company is partnering with ClearPay to integrate Safewww's IDshield software into the ClearChex electronic payment products.
Using IDshield, ClearPay will allow users to secure an online account that they can fill directly from their checking account. The system is paired with software used by the Web merchant to alleviate concerns about identity theft. The new system is also meant to allow Web purchases without the use of a credit card.
Kenneth Bob, CEO of Safewww, said although the agreement with ClearPay is his firm's first venture into online gaming, it's one he feels will open other doors in the sector.
"We have found a very responsive audience," he said. "The market has been responsive and we are in discussions with a number of different companies in gaming, and they are aware of their fraud situation and are looking for good solutions."
He said the new agreement gives gaming operators a legitimate form of payment without dealing with credit cards, and gives consumers some added security as well.
"We are thrilled to be working with such an innovative player in the alternative payment space," he said. "With credit card issuing banks shying away from online gaming, those Web merchants and online consumers can rely on ClearPay to provide secure, fraud-proof payment methods."
Not only does Safewww help make an easy payment option more viable to the online gaming industry, Bob said the software can also cut down on fraud.
According to Meridian Research, Internet fraud will grow from $1 billion in 1999 to $40 billion in 2004.
IDshield lowers the risk of fraud by providing users with a low-cost software product that protects from hacking and identity theft when users are banking or executing financial transactions online.
After a customer has registered to use IDshield, the "authentication agent" is downloaded and installed from the IDsafe server onto the customer's computer.
During this installation, which is transparent to the customer, a unique hardware signature is created and securely stored on both the customer's computer and on the IDsafe server.
Every time the customer requests authentication in order to protect a transaction, the authentication agent checks to ensure that the hardware signature on the customer's machine matches the signature on the IDsafe server.
The customer is also required to enter a personal password. If the results match, the customer is authenticated and may continue his or her transaction.
The system provides a built-in double check for both consumers and operators, Bob said.
"We focus on one thing in life, and that is authentication," he said. "We authenticate two types of activities. One is authenticating access and the other is authenticating an actual payment."
The process takes seconds and adds a layer of personal security. The IDshield's patent-pending technology prevents hackers from stealing a consumer's identity even if they manage to discover some of the consumer's confidential information.
The company claims the system cannot be hacked, spoofed or copied onto another computer, making it secure and impenetrable to unauthorized parties. The system passed technical analysis by independent, international organizations including Israeli security consultant Comsec Group Ltd.
Robert Madden, vice president of sales and marketing for ClearPay, said the addition of IDshield to ClearChex will add to the value of ClearChex for online gaming operators.
"By integrating the easy-to-use IDshield product into ClearChex, we ensure that our customers can do business in a fraud-free environment," he said. "This is ideal for the online gaming market, allowing users to immediately reap their winnings, and casinos to offer a secure payment method to their users."
Bob said cutting back on fraud costs is something every online operator, but especially Internet-gaming companies, should be trying to do.
"We are working in different industries," he said. "We realized the whole area of e-payments needed some attention. All the research shows that the level of fraud online is higher than it is in the brick and mortar world, and in the area of gaming it is even higher."
Bob said the addition to IDshield to sites could also deter those trying to cheat the system, much like the presence of The Club could deter a car thief from stealing a vehicle.
"Not only is it more secure for the casino and for ClearChex, it also acts as a deterrent for fraudsters," he said. "If they tell them up front that they are going to be authenticated after they log in, they may not even try to log in--they will go somewhere else that doesn't have that system in place."
Although Safewww is just now getting into the online gaming market, Bob said his sights are set on the industry for the immediate future.
"Our goal right now is to really penetrate the market," he said. "We are trying to reach out to different operators and different payment providers and hopefully become recognized as a standard to work with."