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Company’s Photo Verify May Give Consumers License to Transact

Mitek Systems Inc., the company that got people to start depositing bank checks with their smartphones, has something new to show the world.

Executive Sarah Clark demonstrated recently, putting her driver’s license under her smartphone’s camera lens. She pressed the button and presto: The app said Clark’s license was the real thing.

How does Mitek (Nasdaq: MITK) discriminate between the document in Clark’s hand and a clever counterfeit? Its new product checks features that the eye can’t see.

OK, so what exactly did the camera pick up?

The pace of the interview slowed as three Mitek executives around the table, who had been speaking enthusiastically, turned quiet. One volunteered that an “enhanced security feature” with encrypted data — visible only to the smartphone camera — is a sign that the license is real. State DMV materials offer few other details, noting that driver’s licenses these days have three levels of security: overt, covert and forensic.

The Mitek technology cracks the encrypted code, reads the information, and verifies the license was issued by the government.

The technology is significant because it uses a mobile device to confirm the authenticity of a government ID, Mitek said.

The business is taking its technology, called Photo Verify, to market this summer.

Mobile Banking Pioneers

Some may know Mitek better as the company that made it possible for a person to hold a check up to a smartphone’s camera and, by photographing it, deposit it in their bank account.

CEO Jim DeBello said Mitek introduced that product just in time for the 2008 recession. But the story has a happy ending. More than 3,700 financial institutions use the technology now, he said, and it’s a win for both the financial institution and the customer. What’s more, DeBello said, it gave people a reason to be happy with their bank. Mitek has nine patents on its mobile check-deposit technology.

The business has a total of 22 patents. Nearly all of Mitek’s 70 employees work in San Diego.

Mobile check deposit was a product of San Diego, not Silicon Valley, the CEO said.

In addition to Photo Verify, the company has a new product that lets a person hold a driver’s license up to a smartphone camera and automatically fill out the fields in credit card applications, loan origination documents and other complicated forms. This is especially useful to people who want to use smartphones to fill out long questionnaires.

Following the Mobile Migration

DeBello spoke of the “tectonic shift” of people migrating from desktop computers to tablets and phones.

“People don’t have the patience to type on a mobile device,” DeBello said, adding that people filling out forms often abandon their efforts while halfway done. The Mitek product shifts the process from a large number of keystrokes to two.

Mitek first showed off Photo Verify in mid-May at a financial technology convention, Finovate Spring 2015, in San Jose.

On the heels of those announcements, Mitek announced plans to buy a company with technology that will complement Photo Verify.

The company said on May 26 that it inked a deal to buy a Dutch company called ID Checker NL B.V. for up to $10.6 million, subject to the company meeting certain milestones.

ID Checker offers cloud-based document authentication and facial recognition technology. Part of that technology matches the facial image on a document with the user’s actual face, taking care to note blinks and small movements to verify it is an actual human.

The Haarlem, Netherlands-based business reportedly has experience with more than 3,500 types of identification documents, from every country in the world.

In an interview prior to the May 26 announcement, DeBello said his San Diego company is thinking on a global scale.

He also said that business may be moving away from what a person knows as a way to determine identity, and moving toward biometric evidence of identity. The classic biometric characteristic is the fingerprint, though the unique shape of a person’s face also works.

A scan of a driver’s license could one day validate high-risk transactions such as high-value money transfers, the CEO said.

MITEK SYSTEMS INC.

CEO: Jim DeBello

Revenue: $19.2 million in 2014; $14.8 million in 2013

Net loss: $5.3 million in 2014; $7.3 million in 2013

No. of local employees: About 65

Headquarters: Kearny Mesa

Year founded: 1986

Stock symbol and exchange: MITK on Nasdaq

What makes the company innovative: Offers proprietary software for identity verification

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