BALANCING RISK AND REWARD WITH INSTANT VERIFICATION

Diginexus CEO Sees Opportunities in EBPP and Beyond

June 13, 2001 SECTION: Vol. 16, No. 11

Philadelphia-based Diginexus, Inc., a software engineering and technology consulting firm, has gained some attention of late for its real-time verification functionality, a capability used extensively in an open standards- based infrastructure it has developed for e-billing provider Princeton eCom.

The new architecture aims to facilitate the electronic billing and payment relationship between Princeton eCom and Intuit in the wake of the former's acquisition of the latter's Quicken Bill Manager.

Diginexus helped equip Princeton eCom to offer real-time on-line enrollment and authentication of new customers; something that holds promise in the credit card marketplace as well, company officials say.

"Within the card issuance space, we're basically providing a secure method of authenticating identities on-line within a matter of minutes, and it certainly has some advantages over existing authentication schemes and might be combined with other authentication schemes as well, said Diginexus President and Co-Founder Matthew Grove.

Emerging Risk Issue
User authentication is becoming increasingly important as a
risk issue, particularly in an on-line financial services environment such as card approvals or EBPP. "It's a tremendously important area because there's both great risk that you enter into by not appropriately identifying people, and there's great opportunity to be had by verifying people quickly and getting them paying bills more quickly," Grove said. "The thing to remember about verification of identity is you can never be totally sure, there's always risk.

Even if I go and present my driver's license to you in person, it's quite possible that I've forged my driver's license. But the questions you want to ask are what's the benefit to verifying people faster and taking on more risk and what's the cost of taking on more risk."

In building the system to support the Princeton eCom-Intuit deal, Grove says there were several challenges to work through. "The deal was happening at Internet speed and we had to pull together a variety of different technologies in a relatively short period of time, while simultaneously innovating certain new mechanisms within the system," he said.

One challenge was changing the way authentication of new customers has traditionally been handled. "For instance, historically, authentication of new consumers within an electronic bill presentment and payment system has been done off-line," he said. "That usually takes about seven days while a consumer mails a check to the bill presentment and payment provider to verify their identity. In our case, we decided that process was too slow and that it caused a number of consumers to drop out because they got bored or confused by the delay, so we decided to innovate a new process that would allow consumers to be authenticated on-line and to be signed up immediately. Putting that together was quite a challenge, because it's an entirely new technology and it requires the coordination of a number of different people, including multiple credit bureaus, our client, Intuit, and a variety of other technology players."

Copyright 2001 Phillips Business Information, Inc. EFT REPORT