Idium Systems: Online shopping the safe way

Here is a different solution for the difficult task of making Internet shopping safe. This is neither just another solution for buying products on the Web with a credit card, nor a solution that gives shoppers a disposable credit card number.

Incidentally, online shopping with a credit card is actually quite safe. Even if someone uses your credit card without your knowledge, you can always disavow the deal and get your money back. It seems, however, that this fact makes no real impression on the public. Fear of disclosing credit card numbers still heads the list of excuses given for not shopping through the Internet.

Idium Systems, which has developed its own solution, does not address the credit card issue at all. According to its concept, the surfer must know with whom he is doing business. They believe that solving this problem will make the credit card issue much less important.

Most surfers making online purchases are familiar with a limited number of e-commerce sites, whose reliability and service they have come to trust. They dismiss a great number of unfamiliar sites for the sole reason that they “look suspicious.”

In order to overcome this fear of the strange and unknown, Idium offers a program called Securo. Securo knows when a surfer is on an e-commerce site and runs a series of checks on the site. These checks are designed to detect whether the site maintains minimal standards (defined by the surfer), whether it preserves customers’ privacy, and what level of security exists between the site and the customer.

After Securo performs the examination, it provides the surfer with a recommendation on whether or not he should shop there. The company's recommendations are very stringent. Idium cofounder, CEO, and head of marketing Or Kuntzman says his company has a database, which he describes “without exaggeration” as one of the biggest in the world, with information about tens of thousands of e-commerce sites in the US, Britain, and Israel.

According to Kuntzman, people buy anti-virus and other security programs in order to prevent their information from leaking to hostile parties. The moment a surfer chooses to reveal his details to an Internet site, however, no security program can help him. In the worst case, he is liable to encounter a site constructed by swindlers. In a less severe case, a site’s managers could be amateurs, who might supply the desired product six months later.

”Cyota and Appletix (the latter has closed down, Y.A.) had a hard time penetrating the e-commerce security field,” Kuntzman says, “because they had to change the nature of online shopping. We simply provide a recommendation on whether or not to buy from the site.”

So how can an Internet site earn bad recommendations? Idium’s system operates in cooperation with software installed with the customer. The moment a surfer reaches a web site that does not appear in the database, the system begins to run checks on the site. If the site does not meet certain security and privacy standards, the recommendation is negative.

The program also checks whether the site is a party to a recognized privacy convention that guarantees that the buyer’s details will not be passed on to other parties. The program further provides the surfer with various details about the site, such as its physical address, the terms for returning products, delivery possibilities, and details about customer support and other means of payment. Regarding data security, the program checks whether the site is linked to the surfer on a secured line, and warns against camouflaged sites (amazzon instead of amazon, for example). The program is built on a database that includes surfers’ comments, based on a number of simple parameters.

Idium checks the information on surfers’ privacy with international organizations dealing with the matter, such as TRUSTe, a nonprofit body that gives approvals in matters of Internet security. Other organizations in the field are BBBOnLine and British organization Which? Online. If the site does not mention an approval from one of these organizations, the program checks the site’s database. If the database includes a privacy convention, the program displays it to the surfer, so he can read it before he makes purchases.

Kuntzman says, “One example of a site to which we gave a negative rating is Israeli site 10bis. The site didn't have an adequate privacy convention. We wrote that and rated the site accordingly. Later, when the site replaced its privacy convention, we revised its rating to positive.”

Kuntzman asserts that over 50,000 surfers have downloaded the program in the first two months after its launching. Kuntzman claims that 900-1,100 downloads are posted every day, a figure worthy of note, considering the size of the client software that must be downloaded – almost nine megabytes.

Idium’s business model is based on accumulating as large a customer base as possible from free downloads. The company expresses cautious optimism that 2-4% of these will upgrade the free program to Securo Pro for $28-38. The company decided on this model after realizing that the model of downloading a demonstration version for a limited period is impractical. Idium expects to launch Securo Pro in six months, and is attempting to raise $1.5 million to complete development.

Idium has raised $600,000 from private investors since Kuntzman and COO and head of R&D Tamir Chen founded the company two years ago. Its current cash burn rate is $35,000 per month. The company’s investors include president and chairman of the board Dr. Arie Ovadia. Ovadia, a man for all seasons, who also serves on the board of start-up InterCure, Israel Discount Bank, Israeli Phoenix Insurance, Elite Industries, Israel Petrochemical Industries, Tadiran Communications, and others.

Published by Israel's Business Arena on January 23, 2002