Thank you to Simon Brocklehurst for his comments about the product. I really appreciate comments from people who take time out of their invariable busy schedules to make constructive comments in the interests of helping others in business. In order to help you better understand the product and to respond suitably to your comment Simon, I have decided to focus on it in this post as I think a number of people will be asking the same questions you have. Unfortunately Robert and I couldn’t go into as much detail about the technology as I would have liked so I wanted to explain our current business model and user experience so that you get a better idea of why we feel this is so ground-breaking.

So firstly - we do not want to replace the credit card in environments that already allow you to use one quickly, easily and securely. You are 100% correct in saying that this is already really easy and secure in Europe with Chip & Pin but there are still a number of ‘offline’ scenarios where paying with a credit card is not possible - for example: most London cabs. When we decided to build this product we were hoping to facilitate these sorts of transactions in a way that was more convenient than making the cabbie stop at an ATM for one to draw cash.

We quickly realised after building a prototype however, that our biggest benefit to everyone concerned lay in online payment processing where credit card fraud is so rife. There is still a benefit to certain ‘offline’ retailers and to users of the system in countries where credit cards are less prolific than mobile phones, but our core focus now is on secure website payments.

Instead of reaching for your wallet and credit card when making a purchase online, we hope you will reach for your mobile phone in the future. Using PocketDuo you will make a completely secure payment (using one of your existing credit cards but never having to enter those details again) and only ever disclose your unique transaction ID to the merchant you are making the purchase from. That way you keep your card details secure, the merchant doesn’t need the burden of managing credit card information, and everyone walks away from the transaction with what they want.

The process is in fact also much quicker than capturing all your card details on a web page as all you need to enter is an 8 digit merchant number, a 4 digit PIN number (simulating the offline Chip & Pin scenario) and the amount you want to pay (as well as obviously select which card to make the payment with from the list shown on your phone). Start to finish this simple process should take between 15 and 30 seconds (competitors and current credit card transactions take anywhere from 30 seconds to a minute and a half to process).

I have a video demo of the product which is slightly better quality than the one that Robert posted and I will try and get that up at the end of the month when I am back in London so that you can really see the nitty gritty of the application.

Regarding the SMS payment solutions you mentioned, the first thing to note about them is that they are only suitable for micro-payments (up to £10 in the UK). They also don’t allow you to bill those transactions to your credit card bill (unless your phone bill is paid by credit card) and earn frequent flyer miles or other incentives for using that card. I do however agree with you that some of those solutions work really well, but getting back to our focus on online purchases, they are not solutions we are likely to compete with on any level (at least not at this early stage).

I hope this post clarifies a few things about our business model and the technology. We want to create a product that is as secure as Chip & Pin but that works best in ‘card not present’ situations (such as for online purchases).

I look forward to further comments and suggestions. We are learning all the time from potential customers and merchants how we can improve our product before official launch and we will certainly think about simplifying our offline payment solution when we focus on that market.

P.S: Our application has been developed to work on the iPhone, Pocket PC devices as well as a Java version for most of today’s Nokia, Sony Ericsson and other ’standard’ cellphones.  We don’t expect everyone to own an iPhone to use this system even though it looks beautiful on that device.