Signature Software to Spur Electronic Commerce

New York-based PenOp's technology blends cryptography and biometrics

Jeremy Newman, president of PenOp Inc., New York, is trying to bring the handwritten signature into the electronic world.

His company is selling a technology that blends cryptography and biometrics to let a person sign his own name to seal a deal, end a letter or validate a check online. The PenOp signature is tied to a single document so it can't be changed or duplicated.

The user first creates a signature template with at least five handwriting examples. Whenever the PenOp software is used, the new signatures are rated between zero and 100 as to how likely they are to be that person's.

Companies might require a 90 percent pass for a large stock transfer; they might accept 40 percent for a small purchase. It is almost impossible for someone to forge a PenOp signature, Newman claims.

If electronic commerce is to succeed, the problem of sending an authorization over the Internet must be solved. Other companies have come up with strategies to use personal identification numbers or other passwords. But Newman claims the pen and the written signature are the best way to go.

The Internal Revenue Service seems to agree. The agency is now using PenOp software for a project called DigEST, which lets some taxpayers file paperless returns.

According to Don Roberts, a spokesman for the IRS, the test will measure processing costs for the agency as well as how much the taxpayer and tax return preparers liked the process.

The signatures are captured on digitizing pads. Then the system records 42 characteristics of the signature, including pen pressure, speed and height-to-width ratio.

The tax preparer then appends the tax form to the signature and sends it to the IRS. The test ran during the most recent tax filing season. Results from that project are not yet in, said Roberts, although the IRS has already decided to conduct a larger test next year.

Besides the IRS, PenOp is selling its system to banks and insurance companies. Newman said he's not interested in solving all the problems in electronic commerce, or even in getting involved in any part other than the signature.

"My ambition is to replace paper with a digitizer," Newman said. "We only worry about the integrity of the signature."

PenOp is so focused on this single component that one of its next target markets is integrators -- the people who put all the parts together. Integrators especially make sense, Newman said, because an electronic signature has global possibilities and integrators are more and more international providers.

In fact, said Newman, that's why he moved his company from Britain to New York. "We want to make an international software standard and you can only do that in the United States," he said.

Going after new markets will take money. Later this year, PenOp will either go public or have an infusion of new private money, predicted Newman.

Regardless of other contracts, the IRS deal will help the company tremendously. "If it's good enough for the tax return, that will lead us into other applications," Newman said.

Earlier this month, PenOp bundled its technology with Adobe Acrobat. Businesses use Acrobat to distribute electronic documents.

The PenOp technology lets users skip printing out a hard copy of the paper to be signed, according to Peter Koolish at Adobe Systems.

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