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EFT: There is a challenge, then, that people want to participate in these things, but they bail out because they have to wait too long to get verified? What's the typical wait time in some of these verifications?
Grove: Historically, you have gone onto a web site and said 'I'm Person X'. They take the name and address you've provided and they go look it up and make sure they match. If they match, they send out a letter to that address asking for a check stub and at that point, the consumer sends back a check that they've written on, the EBPP player takes that and says 'This guy has access to this person's checkbook, if they have access they're probably that person. It doesn't matter anyway, because they've already got access to the bank account.' That process, using U.S. Mail, can take seven, eight, nine days. During that time, consumers may drop out of the process because they don't understand, they forget, or for whatever reason consumers do these things. What we decided to do was to turn that seven-day process into a seven-minute process. There are a number of checks and balances in the system, but the primary mechanism we have is to use so-called 'out-of-wallet' data. The concept here is you and I walk around with a lot of data in our wallets that could easily be stolen from us, and doesn't necessarily, by knowing it, imply that I am in fact the person that I say I am. Out-of-wallet data is not necessarily contained within your wallet. For instance, the make or model of car you have, the size of your mortgage payment, things like that. That is data that credit bureaus typically have. The way the out-of-wallet process works, we use a company, Inside Out Technologies, which has relationships with a number of different credit bureaus. There's a protocol that we've developed, and we actually extended the OFX protocol to take this new enhancement into account. Inside Out Technologies queries some credit bureaus and they construct a list of four or five multiple-choice questions. We then pose these questions back to the consumer, who has about 30 seconds to answer each one, at which point if they haven't answered it the question is yanked back and they fail the process. The questions are things like 'Here are four mortgage companies, which one has your mortgage?' or 'Is your car payment $100-200; $200-400; $400-600 or $600-800?' At the end of this process, if the person has answered all of the out-of-wallet questions correctly, then we verify them. If they failed any, we push them to an outside process.

EFT: What is the benefit of this in the EBPP space? Is it just raising the barrier against someone that may have stolen your wallet and may have some superficial information about you?
Grove: There are multiple benefits. The first benefit is that you're taking a multi-day process to a multi-minute process, which increases the number of consumers that complete the process. From the security perspective, you're raising a barrier in that you have to have a lot more information than what you could get from a wallet in order to steal that consumer's identity. Because there are several places in which we will force you to an off-line process, the risk that we believe we are mitigating is the risk posed by people that are spoofing this process, they fail and they will just fall out. If they come back more than twice and fail, then we'll instantly prevent them from ever registering for the service.

Copyright 2001 Phillips Business Information, Inc. EFT REPORT

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