The Green Sheet Online Edition
March 23, 2009 • Issue 09:03:02
The 21st century signature
Online fraud isn't going away, but a new service called SignatureSafe from ElectraCash Inc. may leave online shoppers more assured. The value-added service gives e-commerce merchants a new tool to retain and increase foot traffic on their sites.
SignatureSafe allows users to sign their names on digital checks using a mouse - or for those who have one, a stylist - providing another layer of authentication for online payments.
"A check has always been designed in order for people to be able to take money out of their checking account," said Richard Cornejo, Director of Marketing for ElectraCash. "We've now taken it to the 21st century, where we've said you can create a real check with your signature on it, online."
Indeed, the service is designed to work in conjunction with another 21st century creation: Check 21 (short for the Check Clearing for the 21st Century Act), the law that mandates how checks are deposited as digital images. But while Check 21 typically involves the reproduction of a physical check transacted in a store, no such prototype exists for online sales, according to Cornejo.
From digital to digital
The closest thing may be SignatureSafe which, by capturing a digital signature, allows merchants using the service to then print out a digital image of a check and run it through a remote deposit scanner - effectively transforming it into a Check 21 document (in essence, a digital check becomes a physical check and then goes back to being a digital check).
"The way the Check 21 rules read, the check has to be created from a physical real check - that's why we print it out and recapture it," said Lee Falls, Chief Executive Officer, ElectraCash. Cornejo said the service was less a foolproof fraud prevention mechanism than a better way to keep records of online transactions and scrutinize checks deemed suspect, adding that the purchasers get their own copies of the digital checks and can also make print-outs.
"You can only do so much in our digital world right now, and we take it as close to matching the consumer as we can," Cornejo said. "It's as foolproof as you can get ... by signing this check and then by printing this check out it has all the information - what Web site they went to, what they purchased, the time stamp and everything else."
Cornejo said the signature itself was usually less precise than a pen-drawn tag, but added that "with a little bit of practice ... you can get pretty accurate in doing it. And you'd be surprised - I've seen people the first time out that have really impressed me the way they were able to sign." Falls called the signature "about 80 percent accurate."
To account for potential difficulties, the signer gets three chances to sign properly, and Cornejo said the "system has intelligence built in - it's picking up so many curves within the signature in order to assume you have actually gone through the process of actually trying to sign your name. You can't just go like a straight line."
For the mousy
Lee believes the service may appeal to merchants typically made uneasy by check purchases.
"Many merchants just take credit cards," he said. "They don't take checks because of the returns issue. But they see their sales dropping, and this might be a way for some of them to keep those sales up."
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