One Payment App Uses Often-Called Friends To Authenticate. (Privacy? What’s That?)

Written by Evan Schuman
February 16th, 2012

A Seattle mobile payment firm is pushing for phone purchases to be done with no PIN, arguing that with this young a market, consumer convenience needs to trump security. Given its focus on authenticating the phone instead of the customer, it’s had to get creative and might be pushing the privacy envelope. It examines the five most frequently called friends, for example, along with a list of installed applications.

Whether or not its methods go too far, it’s in good company in the mobile early-stage convenience versus security argument, with both PayPal—and its phone-less and card-less purchases at Home Depot—and Visa, which is pushing PIN-less EMV transactions while MasterCard is taking the more secure and less convenient pro-PIN EMV position.

The efforts of the Seattle firm—which had been known as Billing Revolution but is now called Buck—are different based on the mobile platform involved. That’s true for several reasons, but one of them is that Apple on Wednesday (Feb. 15) banned Apple apps from engaging in exactly that type of conduct.

“Apps that collect or transmit a user’s contact data without their prior permission are in violation of our guidelines. We’re working to make this even better for our customers. And as we have done with location services, any app wishing to access contact data will require explicit user approval in a future software release,” said the statement, which was issued after requests from a U.S. congressional committee.

The question of explicit user approval, though, crops up in the Buck efforts, because the firm has received that approval from its customers. That said, it wasn’t an opt-in where customers could choose to allow that data exchange via a choice in an Options area. The opt-in was part of the mandatory terms and conditions of the app. In other words, if users don’t agree, they are prevented from downloading the app and certainly from using the app. Either way, Buck will not be using that personal information for Apple phones and will instead use it solely for Android phones, said Buck CEO Andy Kleitsch.

The company is relying on more than device attributes for phone authentication, including operating system version, an app cookie, the SD card, the nature of a Wi-Fi connection, carrier, CPU performance and other items, said Buck CTO Randy de los Reyes.


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Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

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