Mum-in-law inspires new tech to tackle online fraud

A man has developed software enabling customers to pay for online shopping by tapping their card to their phone and entering their PIN number, which he said was inspired by his mother-in-law.

The tap-and-pin system, which is similar to the way card payments are made in shops, has been described as a "game changer" by one industry boss.

Shopping online currently requires customers to share their card details when they pay, a process considered more vulnerable to fraud because of the risk of card details being compromised.

Justin Pike, from Monmouthshire, whose team developed the new technology known as CPoI, said he hoped it would be available to consumers in the UK later this year.

'Why can't I just use my phone and my card?'

Mr Pike said he first got the idea for the technology from his mother-in-law Mary Maddy, who struggled with internet shopping during the pandemic when she could not go out to the shops.

"I didn't feel confident," said Ms Maddy, from Newbridge in Caerphilly county.

"I said to Justin 'why can't I just use my phone and my card?' and it would feel a bit more secure."

After that conversation, Mr Pike - who previously developed software allowing mobile merchants, such as tradesmen or market traders, to use their phones or tablets as secure payment devices - said he thought: "'OK, you should be able to'.

"So this was the next logical step."

How would it work?

Shopping online is classed as a "card not present" (CNP) transaction because shoppers have to share their payment card details when they pay.

This is in contrast to the system used in shops, which is called a "card present" (CP) transaction because the customer physically presents a card or payment device.

CPoI stands for "card present over internet", because it replicates the CP payment system used in shops.

Mr Pike said customers would not be required to download an app or share their card details.

They would instead have the option to tap their card to their phone and input their PIN to make a payment.

CNP transactions are considered more vulnerable to fraud because of the risk of criminals getting hold of sensitive card details and using them to make purchases.

Retailers are also charged a higher fee by payment processors for CNP transactions because of the fraud risk.

According to UK Finance, the umbrella body for the financial services sector, there were more then 2.1 million cases of CNP fraud in the UK in 2023, causing gross losses of £350.5m.

Systems like ApplePay and Samsung Wallet can provide additional security for customers by requiring biometric data like facial recognition or fingerprints and not sharing full payment data with retail websites.

But such services are often restricted to companies' own brand devices and require a customer to opt in.

"The mobile device providers have really charted out the path which gives consumers confidence in using their devices," said Paul Rodgers of Vendorcom, a membership organisation for key players in the merchant payments community.

He said Mr Pike's software offered a "cost advantage" to online retailers because it could lead to cheaper processing fees and reduce their exposure to fraud.

Shoppers in Usk had mixed views on the best way to protect against fraud.

Ruby from Cwmbran said she was very aware of the issue because her dad's card "has been compromised quite a few times".

"I always look for the little lock on the website but I mainly use ApplePay," she said.

Gareth, from Llanarth in Monmouthshire, said he uses Google Pay because it gives out a virtual number to third party sites so he feels "a little bit more protected".

He said his generation had grown up shopping online "without much stress".

"I've never been a victim of fraud," he said.

Global businesses from the electronic payments sector will attend the launch of the software in south Wales later on Thursday.

Mr Pike said he hoped consumers would start to see the technology being used as a payment option before the end of 2025.

Among those attending are global payment platforms Elavon and UATP as well as Transactility, which is the commercial arm of jPOS, a software used in more than 110 countries to route electronic payments from point of purchase to their destination.

Constantino Voulgaris, Transactility's chief executive, said he believed Mr Pike's invention could be a "drastic game changer".

"It's good for everyone, for businesses like us, for merchants, for the consumer, for everyone," he added.

The next few months will reveal how much appetite exists among retailers and customers for the new tech, but if it takes off in the way Mr Pike hopes, he said his "main objective" was to make sure "everyone knows that CPoI is made in Wales".