Cardinal rule

Signature-less credit card transactions done over the Internet and telephone created a demand for a system to help protect merchants from fraud.

Cardinal Commerce supplied the answer.

Traditionally, a credit card number is a “hot” transaction number. If someone has the number, the name on the card and the expiration date, he or she could shop online all day with few problems.

What Mentor-based Cardinal Commerce’s software has done is changed the credit card number to a passive one, requiring a password or pin number, similar to an ATM card. The issuing bank will be the only entity that knows your password, and without the password, a credit card will be useless.

As a result of the new security, merchants will be relieved of responsibility for liability from credit card losses from fraud, which will now go to the issuing bank in the same way as if the card were present.

“The password will be presented to the bank and only the bank for safekeeping,” says Michael Keresman, Cardinal’s CEO. “That’s the only reason they will guarantee payments is (because) they manage the accounts. The problem was, how do you link all the merchant locations back to the issuing bank in real time to get the transaction authenticated?”

Cardinal created software that does exactly that, and in the process, created a substantial market advantage for itself.

“We are one of a few companies certified to do it in the world,” says Keresman. “We think we can do it better than anyone else. It’s the only solution that can handle MasterCard, Visa or any other brand, and it’s the only system deployed in mass to merchants.”

Eventually, credit card companies like Visa will want to authenticate every transaction where there isn’t a signature, including mail order and pay-at-the pump transactions. Half of all electronic transactions are done without a signature.

“Other than the introduction of the credit card, I don’t think there has ever been a bigger play than this one,” says Keresman. How to reach:Cardinal Commerce, (440) 352-8444