Consumers may soon authenticate their online banking transactions using only their voices, if the latest brainchild...
of WorldPay founder Nick Ogden takes off.
Ogden hopes that banks and retailers will soon adopt the voice biometric technology developed by his new company, Voice Commerce Group, working with Nasdaq-listed Nuance Communications and launched today in London.
Several UK banks are known to be testing voice-based systems, including Royal Bank of Scotland, the bank that bought WorldPay for an undisclosed sum.
Ogden said the operation is comparable to working with the specimen signatures a bank holds to authenticate customers' cheques. He said that, as with cheques, the system also transfers the signing responsibility back to the consumer, thus lowering the banks' risk of losses from fraud.
Ogden said Voice Transact operates similarly to WorldPay in that it provides an independent online payment platform. The Jersey-based site will store the voice prints of customers who will have to record a three-minute series of random numbers when they sign up to the system.
He said the company has spent £5m building a 50-country network to service banks and provide an interoperable environment to settle transactions. Ogden guarantees all transactions that the system accepts are non-repudiable.
He said Visa and MasterCard will audit the scheme every three months, and he has started negotiating regulatory compliance issues with various financial services authorities.
Ogden says the Voice Transact system is the first platform for voice signatures that integrates all current standards, namely Visa and MasterCard Level 1 PC1, ISO 19029, and EU certification 1999/93 for digital certificates within the Single European Payments Area.
To reduce the risk of fraud the system checks not only the voice print but also checks the caller's transaction history, location (via calling line indicators) and secondary "know your customer" data, he said.
"Voice signatures processed by the Voice Transact service could help significantly secure payment transactions and reduce fraud and phishing-related scams," Ogden says. Apacs, the UK payments clearing associated said that in 2006, UK losses from these scams came to £428m.
He said Voice Transact will enable financial institutions to tap into new markets, such as mobile payments. Research firm Edgar Dunn & Co predicts that mobile wallet applications will reach 1.4 billion users by 2015, or 25% of mobile phone users worldwide. "We expect most our our transactions to be from mobiles," he said.