Associer les technologies mobiles et celles liées aux cartes de crédit pour redonner le contrôle aux utilisateurs, tel est l’objectif poursuivi par la Fintech Ondot. Bharghavan Vaduvur, CEO d’OnDot détaille la solution développée par sa société.

Article rédigé et interview conduite par Alan Zeichick.



Power in the hand that holds the card

“The people have the power. All we have to do is awaken the power in the people” said John Lennon.

“If an organisation like Equifax cannot protect my data, what chance have I against cybercrime?” That could be running through the minds of more than 140 million people whose credit records were compromised in the massive Equifax hack that hit the news this year.

Of course, you could argue that there is a far greater incentive to hack a giant organisation sitting on a mass of priceless data, and it is far less to be gained from an individual – but we are not addressing thoughts here, we are addressing feelings. And the feeling is about powerlessness. Faced with a faceless mob of bright young hacker prodigies, organised crime syndicates, industrial and political espionage and now cyber terrorism – is there any reason for me to trust my hard earned wealth to a piece of plastic, however smart its embedded chip?

It’s the sort of reflection that many of us try to avoid – maybe we should just go along with the system we all live by? But it was very much on my mind during this year’s NetEvents Global Press & Analyst Summit in San Jose, California during discussions on innovation in FinTech security. One of the things that scared me most during a panel discussion chaired by Eric Parizo from GlobalData, was the agreement that the there was nothing new or radical about the Equifax breach, it had simply been more successful. Same old same old hits a bigger than ever jackpot. Ouch!

In that context, I did find some hope in a radical new approach to card security being suggested by one member of the panel: Bharghavan Vaduvur, CEO of a company called Ondot. Discussing new approaches to FinTech security he said: “There has always been a dichotomy between reaching out to the users and giving them too much power versus security. But now, with new devices enabling ‘always on’ communication, higher engagement does drive higher security.”

He has a point: traditional thinking does tend to assume that the first wall of protection requires taking security out of the hands of messy, absent minded or just plain stupid members of the public, and making sure it is centralised in the hands of those with the knowledge experience and technology to keep it safe. People like Equifax.

But Bharghavan Vaduvur was saying: “Our perspective is that the only way out is to give consumers better visibility and it’s really security through engagement.” And he meant it – for Ondot is championing a system that allows the holder a lot of power to manage their own card.

Interviewed later by Alan Zeichick for NetEvents TV, he explained: “Ondot is a payment technology company based in the Silicon Valley.  Our core value proposition is in empowering consumers to personalise their payment card experience.  Pretty much everybody has credit or debit cards.  Everybody has a smartphone, so we’ve created a solution that allows consumers to take control over their payment card experience.”

For all the power of a card issuer’s central security based on massive data records searched by sophisticated AI algorithms, still no one knows an individual’s spending habits better than the individual themselves. So there must be huge security benefits from a simple interface that allows the user to instantly control how the card can be used – in what locations, at what establishments, for what sort of purchases at what time – and sends immediate notification of its use.

As Vaduvur put it: “If you look at the typical user experience in day-to-day commerce, there are these two ubiquitous but historically disparate streams.  One is the payment channel.  The second is the mobile channel.  Ondot really brings these two together.  We sit at the confluence of real-time payment and real-time user communication, so that we are able to bring in user preferences and user context into the authorisation stream in order to support or promote security, engagement and commerce”.

Just think what this means. If you cannot find your wallet, do you immediately phone the card companies and cancel all your cards? No, because you may not want all the hassle of card replacement when it could just be in the wrong jacket pocket. But what if you could just open an app on your phone and lock the missing cards, knowing that no-one can now use them and as soon as you find your wallet you can unlock them again yourself? Let’s say you are prone to losing wallets and are going on holiday: you could block the card from any transactions outside your holiday destination, and you could also limit the type of transactions you will allow.

I have not told any cardholder about Ondot without them responding: “I want that!” It is such an attractive offering, so whom are they selling to? Vaduvur explains: “Our customers are typically either large financial institutions or payment card processors, the entities that authorise transactions and deal with payment cards on the issuer side.  Now, their customers are typically end users, as far as large financial institutions are concerned, or for payment card processors, it’s a two-level sale, so payment card processors who then process on behalf of card issuers, smaller or medium-size banks who then serve or provide the solution to cardholders.”

That explains another reaction that I am beginning to hear: “Isn’t that the same as Total Control?” Or “Card Valet?” Or “Card Rules?” The fact is that Ondot is selling its system as a white box product that is customised by the buyer, so this growing number of card management offerings are in fact all of them Ondot under different wigs! And there are very good reasons why it is proving to be so popular with the card companies.

Empowering customers with control and visibility over their transactions leads to greater engagement. Reluctant card users gain confidence and use the card more, while active cardholders move the personally managed card to top-of-wallet. “User engagement drives increase in card usage – we’ve seen about 23% on the average. And reducing false declines – we’ve seen about 16% reduction.  The second part is reduction in fraud cost and support cost.  We’ve seen a reduction in fraud cost of about 40% and reduction in support cost of about 26%.” Needless to say, this all increases net revenue and it amounts to a rapid return on investment.

This, to me, was the most exciting development in a conference that was full of innovative security solutions, because it approached the question of card security from a fresh perspective: “Ondot is at a very critical juncture in the payment ecosystem.  We see transactions in real time.  We have the ability to communicate with cardholders or users in real time.  So today, what we’ve done is created a security solution that allows consumers to secure and gain confidence over their payment cards.”

The greatest innovations do not only solve existing problems, they also open up whole new areas of opportunity. Zeichick’s final question to Bharghavan Vaduvur was: “So why are card issuers and your other customers using Ondot’s technology?  What’s in it for them?”

Vaduvur pointed out how such real-time collaboration could build an even stronger user community though personalised offers related to the users’ whereabouts, preferences and time of day. “But now you can use these sorts of contextual services, where I am and how I’ve shopped in the past, in order to drive things like contextual offers, contextual communication, as well as use predictive analytics to help banks really tailor the communication and personalise it for cardholders.”