card.io: Like Square, but without the square

It’s been a busy week folks! I’m pleased to announce the developer launch of K9 Ventures’ portfolio company, card.io (pronounced card-I-O). As the name suggests, card.io is the simple and secure way to accept credit cards in mobile applications. A huge congrats to the founding team of Mike Mettler, Josh Bleecher Snyder and Brent Fitzgerald on the launch!

Here is just some of the coverage on card.io’s launch:

Several folks are familiar with Square, Jack Dorsey’s (@jack) company which does credit card scans using a card reader dongle. Square works by using an add-on hardware device that connects to the audio port of your iPhone (or other iOS device) and allows you to swipe a credit card with it. It’s pretty cool. However, I always wondered what happens if I want to scan a card while still listening to music? (I’m kiddding!!) Actually, the more important question is, what happens if you don’t have the reader attachment, or, if you forgot it at home, or left it in your other pocket?

Well, what Square and others like Intuit’s GoPayment are doing is simply reading the card information from the mag stripe and then processing the payment. Well, almost all of that information also appears on the face of your credit card: it has your card number, the expiration date, and your name. So the guys at card.io wondered, “hmm, what if we could just use the camera on your phone to scan the card and read the information directly from it.” And so there you have it, card.io lets any phone with a camera now become a credit card scanner! Or as I like to say: it’s Like Square, but without the square.

Technically speaking, the problem that card.io is solving is a non-trivial problem. Even though the problem is somewhat constrained by having to look mostly for digits from 0-9, with a relatively uniform font, there is a large amount of variation between credit cards. In addition, cards have different amount of wear and tear on them, they have different colors, backgrounds, the card scanning may happen under different lighting conditions. The major benefit of using a hardware card reader like Square, or a visual card scanner like card.io is that it makes it quick and simple to get the credit card information — you don’t have to type in 16+4 digits in by hand. It is critical for any card scanner to be fast. Anyone who has worked with computer vision knows that it is a relatively compute intensive task, so doing it fast requires a bit of technical jugglery.

The card.io team has spent a lot of effort in solving these hard technical problems and has developed a product that provides both an elegant user experience, and, an API that makes it very simple to integrate card.io into mobile applications. card.io can be used in a couple of different ways — mobile app developers who want to provide users with a way of making credit card purchases through their application can integrate card.io and thereby allow their users to scan their own credit cards for purchases quickly and easily. Additionally, any mobile merchants can use card.io to process payments from their customers on the go — without needing a card reader/dongle to do it.

It’s true that using this approach at present qualifies for the “card-not-present” exchange rate from the card processors. However, card.io’s target is not retailers who are trying to optimize their card processing rate, but instead it’s trying to drive incremental sales and revenue by reducing the friction for processing a credit card payment for mobile commerce.

I’ve known Mike Mettler, the co-founder and CEO of card.io, for a while now and first met Mike when he had just left AdMob. Mike showed me a prototype of their app in October, 2010. It was one of those “duh!” moments for me, as in “Why didn’t I think of that?” After all, I was already heavily involved with CardMunch at the time. When I met Josh Bleecher Snyder, the co-founder and CTO of card.io, I was blown away by Josh’s ability to learn and code and just make things work. I remember Josh telling me that he learnt about Computer Vision by “reading the book” (Gary Bradski‘s awesome book Learning OpenCV), which just blew me away because he is by any definition an expert in computer vision. Brent, the founding engineer of card.io was previously a member of the founding team at Sifteo.

Even though folks like to argue that credit cards are “old technology,” they are ubiquitous, and not going away anytime soon. card.io’s mission is to make it easier for any mobile application developers to accept and process payments via credit card on smartphones. If you’re a mobile app developer, you can request early access to the card.io SDK on the website.

Congrats again to the card.io team — can’t wait to see all the applications that use card.io!

You can follow me on Twitter at @ManuKumar, or, follow @K9Ventures for just the K9 Ventures related tweets. You can also follow @cardio on Twitter.

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card.io: Like Square, but without the square