NEW YORK – Payfone, which provides mobile identity authentication for digital users, has raised a $23.5-million Series E round of financing. BlueCross BlueShield Venture Partners and investor Andrew Prozes led the round with new investors Strauss Zelnick, Maclab Development Group and Transaction Network Services, and with participation from current investors RRE Ventures, Opus Capital, Relay Ventures, Early Warning Services,American Express Ventures, Verizon Ventures and Rogers Venture Partners.
The financing reinforces Payfone’s leadership in the high-growth authentication market. Enterprises harnessing the power of digital channels to transform and grow their businesses are burdened with the increasing cost and complexity of authentication to fight identity theft and social engineering attacks from professional attackers.
“Years ago, we made a contrarian bet that the way in which mobile phones instantly authenticated themselves would solve fundamental issues with validating digital transactions. The web and mobile channels continue to suffer through the historical struggle with the trade-off between security and convenience. And now the days of protecting sensitive data and securing high-value transactions with text messages, one-time passcodes, and knowledge-based questions, are numbered,” said Rodger Desai, CEO of Payfone.
Payfone’s patented mobile authentication technology is the first and leading solution to provide protection against these attacks, curbing fraud losses and authentication related expenses while driving engagement and customer lifetime value.
“Our mission at Payfone is to add instant trust to digital so businesses can focus on adding value to customers with engagement and servicing. Payfone is establishing the standard for how enterprises secure and authenticate digital transactions,” continued Desai.
The National Institute of Standards and Technology (NIST) recently warned of the vulnerabilities of two factor SMS as an authenticator. Additionally, the Chief Technologist at the Federal Trade Commission (FTC), Lorrie Cranor, was hacked with simple techniques that showcased the issues with current authentication standards.
“Payfone’s product set affords healthcare organizations the ability to shift valuable time and money spent verifying identity to driving engagement and better healthcare outcomes. Regulated industries such as banking, healthcare and insurance have a lot in common in this regard. Customers in each industry are shifting their activities to digital channels: from sales to customer services, to payments,” said Mike Spadafore, representing Blue Cross Blue Shield Venture Partners. “Through this investment, we are reinforcing our commitment to ensuring that healthcare consumers benefit from cutting-edge security solutions and protections.”