Until now, making payments for purchases with a credit card has been fraught with risk. Professional hackers have been able to penetrate many supposedly secure payment systems, leaving both the company and the purchasers vulnerable. Recent national examples include Target, Home Depot, and Jimmy John’s. Local businesses are increasingly experiencing similar issues.
Introducing iPIN Debits by IFAN Financial Inc (OTCBB: IFAN). It looks like a solution that appears to be the next evolution in payment processing.
The problem is that credit card purchases involve the exposure and transfer of sensitive information such as a credit card number, expiration date, or card security code (the three digit number printed on the back of the card). These are termed “card not present” transactions, providing merchants the ability to accept payment without physical card confirmation.
Debit card use is termed a “card present” transaction since the actual card must be in the hands of the purchaser. Swiping a card on a reader requires only a PIN number and a confirmation of the availability of funds sufficient to conclude the transaction. There is simply nothing to hack.
IFAN’s new technology enables buyers to use a debit card for any purchase, since the company furnishes a card reader that is smaller than the card itself. Simply attach the reader to a computer, phone, or tablet and anyone can use a debit card for any purchase regardless of time or location.
The statistics involved with the payments industry are overwhelming:
- Mobile payments alone will exceed 0 billion by 2017.
- Merchants spend .6 billion each year on credit card security that is not secure, resulting in higher prices for their products and services.
- Credit card companies charge merchants from 5 to 10% to process transactions. Debit card fees are typically 2% or less.
- There are now over 130 million computer programs designed to steal credit card information.
The only current alternatives to IFAN Financial Inc. (OTCBB: IFAN) are third party platforms such as PayPal or Western Union. However, those involve setting up an independent process that both merchants and purchasers find inconvenient. In addition, the fees PayPal charges exceed those of IFAN and PayPal withholds merchant payments for up to two days.
There is no way to predict the eventual impact of IFAN on the payments industry. However, most analysts feel and common sense dictates that usage will explode once the benefits are widely disseminated.
This isn’t meant to be investment advice because I’m not a broker, so you should consult your broker if you are thinking about investing.