AN E-COMMERCE security company is to go on the fundraising trail after it secured a valuable US patent for its technology.
The directors of Edinburgh-based Payfont aim to raise £45 million, which would help the company roll out a working prototype of its identity fraud prevention software by the end of this year.
David Lanc, chief executive of Payfont, said the effect of winning the patent in the lucrative US market has given existing and potential investors greater confidence.
He said: “We have some heavyweight venture capitalists who are all keen to see us. It is as if I was speaking Swahili and have now switched on the interpreter.”
Payfont previously raised £350,000 from investors to support the development of Payfont’s biometric security system which is designed to eradicate card and identity fraud in online transactions.
Lanc, a former director of cards strategy and development at Royal Bank of Scotland, estimates the system could save US merchants from losing “tens of millions” of dollars due to fraud.
The firm’s patent will be completed in March, which will then clear the way for the company to make serious approaches to investors. Payfont is in the first instance targeting banks that will implement the technology as well as invest in its roll out.
Lanc said: “This is a major and very exciting breakthrough for us. It is a real validation of the unique novelty we have developed over the last six years to bring safe, simple e-commerce to the world, whilst truly combating online identity fraud.”
National Fraud Authority figures for 2011 report 4.6 million people in the UK were affected by identity theft, costing £1.2bn. The US market is estimated to be 12 to 14 times bigger.
Lachlan MacKinnon, a computer security and counter measures expert at Greenwich University, said: “Payfont provides a significant step forward in the provision of secure payment processing.
“The behavioural biometric patented by Payfont, originated and developed in Scotland, offers consumers an easy to use and repeatable protocol to validate themselves when making purchases.
“The design of Payfont has focused on ensuring that consumers have an easy-to-use, one-click system to support online and physical purchasing, but they have the reassurance of a state-of-the-art secure biometric validation system combined with a highly secure payment processing model to protect those transactions.”