During 2020-2021, we all had a lot of time on our hands due to the lockdown caused by COVID and for Justin Pike, a new payment method was born out of a conversation with his mother-in-law.
Now, the Burbank CEO and Founder has put the idea into action as Card-Present over Internet (CPoI) is the latest online payment method to help provide a seamless and secure checkout experience, in particular for older people.
Pike spoke to Payment Expert on the “gamechanger” impact he believes CPoI will have on the payments industry and when the solution will be expected to be rolled out.
Payment Expert: Firstly Justin, could you break down what Card-Present over Internet (CPoI) means for the uninitiated?
Justin Pike: Simply, CPoI makes the way we pay online simpler and safer than ever before. It’s exactly the same process and technology as how we pay in-store with Chip-and-PIN, but with one difference – it happens on a consumer’s mobile device instead of a payment terminal.
In-store, the combination of the physical card and PIN entry enables the cardholder’s bank to confirm it is the true cardholder making the purchase. This is called a card-present payment, and the liability for the transaction sits with the card issuer.
Online, there has previously been no way to categorically confirm the true cardholder is making the purchase as there is no physical card and no PIN entered. This is called a card-not-present (CNP) transaction, and the liability sits with the merchant. CNP transactions have much higher instances of fraud and chargebacks.
At checkout, consumers shopping online select CPoI as the payment method. Then, they simply tap their card against their mobile device and securely enter their PIN, just like they would in-store. The transaction is encrypted from the moment the card is tapped and card data is protected as it travels securely to the payment processor. Card data is never stored.
As CPoI is a card-present payment solution, the liability sits with the card issuer and therefore provides a noticeable reduction for merchants in fraud and payments-related fees.
PE: What was the inspiration behind the creation of CPoI and what are some of the key fraud issues it is trying to address and solve?
JP: It all started with my mother-in-law. During Covid, every Monday morning I’d have to call her to help her pay for the things in her online basket because she just didn’t trust the internet. She’d always ask, “Why can’t I just tap my card on my phone like I do in shops?”
That was the moment I realised the problem wasn’t just about fraud or tech, it was about trust. Because for many people, the way we pay online doesn’t feel familiar or secure.
It’s estimated that online payments fraud cost merchants up to $40bn last year. As noted earlier, CNP payments provide too much opportunity for fraud and chargebacks, and this is a growing issue globally.
There is, however, a bigger and less known issue – false positives. These are legitimate payments wrongly flagged as fraud and therefore stopped by anti-fraud technology.
False positives cost merchants over $443bn per annum. CPoI completely eliminates false positives because it removes the need for anti-fraud technology. If the card is real, the PIN is correct, and the funds are there then the transaction goes through. It is that simple.
PE: Have you leveraged any past experiences from starting companies like MYPINPAD and eNett in helping to build Burbank and its payment solutions?
JP: My vision for all the companies I have founded has always been to make payments safe, simple, and secure for everyone. At MYPINPAD and eNett we built some of the world’s most complex payment and security solutions that continue to be used today. These experiences have provided me with a strong foundation for Burbank, but I view this venture very differently.
This technology will fundamentally change online payments, it’s the big one for me. The beauty of CPoI is that we’ve found a way to scale the world’s most trusted, proven payments methods online.
Burbank wouldn’t be possible without the expertise and skills of the team, who I’ve worked with for over a decade. Collectively we know the industry inside out and know how to make things that scale. A team like this is such a rarity, and that’s how we’ve managed to get to where we are today.
PE: How is Burbank’s CPoI helping to provide financial inclusion opportunities for customers, particularly older demographics?
JP: CPoI was created for this very reason. As mentioned, coaching my mother-in-law through her online order processes during Covid was what sparked the creation of CPoI. My mother-in-law didn’t trust the internet, but she trusted me to help her.
This situation gave me a new perspective on the problem, and understanding that while financial literacy doesn’t come naturally to everyone, that doesn’t mean they should be excluded. This fear of fraud and complications in the payment processes contributed to a lack of trust for my mother-in-law and I’m sure, many more.
I don’t just believe that CPoI is a total gamechanger, I know it is.
For many people of the older generation, paying online doesn’t feel familiar or secure – so why not bring what does feel familiar to them into their homes?
PE: Are there plans to roll out CPoI over the next year and are there countries/markets you have identified that it will perform well in?
JP: Short answer – yes. Interest is strong globally. In March this year we completed our first funding round, led by Mouro Capital with support from Anthemis, Foxe Capital, and Portfolio Ventures. This investment underpins a global roll out of CPoI.
Roll out of CPoI is underway with global acquirers and payments services providers (PSPs). CPoI is live, certified, and ready to scale, not just in theory, but in practice. It integrates straight into existing systems, and our priority is getting CPoI into the hands of the right businesses who can scale it quickly.
PE: Lastly Justin, and thank you for your time, why do you believe that Burbank’s CPoI solution can become a truly groundbreaking payment innovation for the future?
JP: I don’t just believe that CPoI is a total gamechanger, I know it is.
For the first time in history we’re making it possible for merchants and cardholders to reap the benefits of card-present transactions online, making the process safer and less susceptible to fraud. Consumers get a simpler experience. Retailers reduce fraud, increase conversions, and cut costs.
CPoI is better for everyone.
