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A startup technology company aims to streamline credit card transactions for application developers and small merchants, without specialized dongles or transmitters. Card.io offers a software development kit that coders can use to integrate secure credit card capture into mobile apps without violating strict new rules about storing personal data.

Online merchants, like software companies and service providers, often pay higher merchant processing fees than brick-and-mortar retailers. Merchant banks often justify the costs by citing the increased risk of accepting cards not in the presence of the actual vendor. Card.io bridges the gap between traditional and online credit card processing by requiring customers to scan their cards with their own camera phones.

But is it secure?

Collecting images of both the front and the back of a credit card often reduces risk for merchants, who can use the visual proof to defend their companies from chargebacks. However, simply storing photos of a customer's account information falls outside of industry security guidelines, and would violate most merchant processing agreements.

To work around that limitation, Card.io encrypts the scans and tokenizes them before submitting the information to a developer's preferred merchant gateway. Card.io costs developers 15 cents per scan, with a $30 service credit for new subscribers.

One early adopter

One early adopter of Card.io's software development kit (SDK) intends to use the platform for both personal and business credit card payments. According to a TechCrunch post announcing its beta launch, ZipPay has merged the Card.io scanning functionality with its proprietary encryption technology. The pairing enables the company's members to securely transmit funds to each other, without storing sensitive account information on central servers.

The company's website positions ZipPay as a more secure and flexible alternative to services like PayPal, which requires account verification, and Square, which requires a traditional magnetic stripe reader. Small vendors, like food trucks and mobile merchants, have driven the expected demand for mobile point of sale devices up by over 9 percent, according to analysts at TechNavio.