CompoSecure releases Arculus business solution to reduce fraud and online hacking

CompoSecure launched its new Arculus business solution, enabling businesses and their customers to protect customer data and reduce fraud and online hacking. Working with Nok Nok Labs, CompoSecure has developed this FIDO-enabled “internet ID and payment card” technology as a virtual key for the authentication of a user into almost any digital service (e.g., website, mobile app, digital payment, social media, etc.).

eCommerce is a prime use case for Arculus, as global retail sales are expected to reach $4.9 trillion this year. The Arculus multi-factor identity authentication can significantly stem the flood of payment fraud that happens every year, which is estimated to cost merchants $40.62 billion in losses by 2027.

“Every business that has a digital interaction with a customer would benefit from a strong customer identity and authentication platform like Arculus – it will simply be the cost of doing business in the future,” said Jon Wilk, CEO of CompoSecure, which previously announced its proposed merger with Roman DBDR Tech Acquisition, a special purpose acquisition company. “Imagine a world in the not-so-distant future where businesses can verify that purchases were actually made by the authorized user using a personalized and universal digital identity. Arculus is the first step towards this vision that can reduce chargebacks for merchants, identity theft for customers and online hacking.”

Digital identity protection and authentication

Any business with a digital footprint can benefit from Arculus technology. Whether it is verifying a user’s identity or protecting customer data, Arculus can improve the business’ security, privacy and user experience.

Arculus expects to integrate its digital security technology seamlessly into a business’ legacy payment platform, providing strong key-based security. Arculus expects to provide added security across a wide range of sectors. Here are a few examples:

• Identity protection – Identity theft cases cost $502.5 billion in 2019, increased 42 percent to $712.4 billion in 2020 and are expected to rise again this year to $721.3 billion. The ability to provide identity protection is central to the next generation of digital interactions with consumers. Arculus can be used to provide personalized and customizable “verifiable claims,” where user identity is validated to reduce fraud.
• Payments – Arculus authentication provides added security to touchless payments and online “card-not-present” transactions. This technology is expected to reduce chargebacks and fraudulent use for merchants and provide better security and ease of use for consumers. Adding Arculus’ capabilities is expected to make it significantly easier for businesses to onboard new customers, eliminate the annoying text code confirmation process and provide a better customer experience at checkout.
• Online banking – More and more consumers are banking digitally and need both convenience and protection. The “internet ID and payment card” provides a strong credential for secure transactions that can be embedded into other identity verification systems, such as banking mobile apps using FIDO.
• eGaming – Arculus aims to provide much needed security relief for the 2.9 billion eGamers worldwide as the $175 billion gaming industry experienced an increase of 393% in fraud globally. Arculus expects to not only protect, but also improve eGaming payment ecosystems and may also add cryptocurrencies as a payment alternative.
• Online gambling – Internet gambling providers will have the ability to add Arculus’ multi-factor authentication to streamline security without compromising ease of use for higher-value bets and transactions while reducing fraud.

A new white-label cryptocurrency cold storage solution

In September 2021, the first Arculus technology solution launched with the Arculus Key card, a cryptocurrency cold storage solution that connects to the Arculus Wallet mobile app via an encrypted NFC connection. This solution provides intuitive controls, advanced security protection and the ability to manage multiple cryptocurrency wallets in one easy-to-use mobile app.

Now, businesses can offer a white-labeled version of this non-custodial key management wallet that provides the same security, privacy and ease of use as the Arculus Key card and mobile Wallet app. Cryptocurrency exchanges, financial institutions and other fintechs can add their own branding to the platform, offering customers safe storage of their cryptocurrency in the Arculus-powered wallet.

Arculus and its software development kit (SDK) will integrate directly with both custodial (the exchange stores a user’s keys) and non-custodial (the keys are held privately by the user) cryptocurrency exchange platforms. Custodial platforms can expect maximum protection through FIDO authentication with passwordless login. For non-custodial exchange platforms, Arculus can provide the power of its full key signing capability.

On April 19, 2021, CompoSecure announced that it had signed a merger agreement with Roman DBDR Tech Acquisition Corp. Upon closing of the proposed merger, the combined company will operate as CompoSecure, Inc. and plans to trade on the Nasdaq stock market.

The transaction reflects a pro forma enterprise value for the combined company of approximately $1.2 billion. The transaction is expected to close in the fourth quarter of 2021 and remains subject to approval by Roman DBDR stockholders and other customary closing conditions.