This Startup Is Going To Revolutionize The Credit Card You Already Have In Your Wallet
Admittedly, the bank was doing something most do: Trying to stay one step ahead of card thieves.
But what if there was a way to pair your card with your smartphone - implementing what is essentially two-factor authorization to purchases - to make sure it's always you handing the card over at a store?
That's just one of the many features in a new app created by OnDot, a San Jose, Calif.-based startup that's going to revolutionize the way we use the credit card.
With OnDot's CardControl, users can turn a card on or off with one swipe, restrict purchases to certain geographical locations, get alerts whenever a transaction is made, view card history, and even hand off a card to a family member and restrict purchases to certain items.
For instance, a parent could give a card to a son or daughter, set a spending limit of $20, and restrict them to purchasing items only found at grocery stores.
Pretty incredible, right? Here's the best part: It can work with the cards you already have in your wallet.
"Our system applies to every card," said Vaduvur Bharghavan, co-founder and chief executive officer of OnDot Systems.
OnDot has been in "stealth-mode" for three years, fundraising, testing its product and developing business relationships. In that time, it's raised $18 million and perfected its product, in addition to partnering with four major credit card processors and 10,000 banks and credit cards across the US.
There are so many possible uses for the app, it's hard to choose the best one:
- Traveling on business? Snap a photo of receipts and email them back to your accounting department immediately.
- Forget your card at a bar? Just turn it off until you find it, instead of calling the bank to cancel.
- Don't ever shop online? Turn off all transactions from Internet-based merchants.
While there are plenty of features for consumers, banks partnered with OnDot have seen remarkable benefits as well.
Lone Star National Bank saw fraud decreased dramatically, while consumers made more transactions and spent more money overall. Bharghavan says the reason is due to consumers having more trust in the OnDot-enabled card, pushing that one to "top of the wallet" status.
"We were able to decrease our fraud losses from $450,000 in 2012 to $180,000 in 2013, a reduction of over 60%," David Penoli, LSNB's chief operating officer, said in a statement. "This has been a big breakthrough, and justifies the solution on its own."
The company has 70 employees - many based in India - and is led by Bharghaven, who previously founded Meru Networks, a wireless networking company which had its IPO on the NASDAQ in March 2010.
OnDot wouldn't provide Business Insider with specific revenue numbers, but Bharghaven did say the company makes its money through recurring fees charged to banks based on active users.