New Consumer Mobile Payment Option: A Credit Card Scanner App

Last June, Card.io introduced new credit card scanning technology known as "visual swipe" to developers during a private beta test. By using a smartphone`s built-in camera, Card.io enables users capture a picture of a credit card to make and receive payments. Since then, 160 developers have begun using Card.io`s technology.

The startup is now ready to launch a consumer payment application for Android and iOS devices that will be able to process the payment in its entirety by collecting the funds and depositing them into the recipient`s bank or PayPal account. Because no additional unique hardware is necessary to use Card.io, it is more convenient for users than other mobile payment competitors such as Square. Also, all that is necessary to set up an account is a verifiable email address and a password.

Card.io was created by Josh Bleecher Snyder and Mike Mettler, both former employees of mobile advertising company AdMob.

"Most consumers don`t have separate hardware to swipe a credit card, so we built this app for them" said Mettler, according to online news source gigaom.com. "Whether you`re splitting the bill at lunch, paying a friend for gas on a ski trip, or buying a couch on craigslist, Card.io payments is the fastest, easiest, and most secure way to accept payment."

To use the Card.io payment app, the individual who will be receiving the funds enters in the amount they wish to charge someone and scan the card using their phone`s camera. Because the app uses 128-bit SSL encryption, the transaction is secure. Additionally, the app does not save the card image or card data.

Card.io will hold on to the funds until the user sets up a payout method, either a PayPal account or a savings or checking account at a bank.

The cost to use Card.io is 3.5% of each transaction plus 30 cents, which is higher than Square`s flat rate of 2.75% per swipe and 3.5% plus 15 cents for time the payment card data is entered by hand. However, perhaps the ease of use associated with Card.io due to the absence of extra hardware will make the higher fee seem worthwhile to users.

Whether or not consumers will feel comfortable utilizing cards scans to transfer money remains to be seen.

Bryant Park

Bryant Park is a financial consultant for one of the companies listed on Wall Street. He writes on a variety of topics ranging from credit cards to different loans that can be availed by consumers. He holds a bachelor degree in Financial Services from Dartmouth College.