Take A Lesson From Drug Dealers To Make Your Online Shopping Safer

In the wake of the recent revelation that over a billion Yahoo! Inc. YHOO accounts may have been compromised, as well as accusations from some U.S. intelligence officials that the Russian government may have hacked the Democratic National Committee, cybersecurity is at the forefront of the national conversation.

Shoppers concerned about the privacy and security of their online transactions might find a potential solution by taking a page from drug dealers.

Privacy, a New York City-based startup, allows online shoppers to shop safely by using "burners," a temporary virtual credit card created for online transactions. "Burners," in drug dealing parlance, are prepaid cell phones used to coordinate illegal transactions and avoid police detection.

The company recently secured a $2.2 million dollar seed round led by Index Ventures.

Putting You In Control

"Privacy puts the control back in the user's hands," said Privacy CEO Bo Jiang in an interview with Benzinga. "Normally if you use a credit card, you are trusting the merchant to say that they won't delay a recurring charge or do shady things. With Privacy, you click the button while checking out, and boom, it fills in like a brand new card."

Privacy, through a partnership with Visa Inc V and a partner bank, has a block of credit card numbers that fill in for a shopper's card. Jiang detailed the way the technology works to Benzinga.

"One way to think about it is basically we've built this layer that sits on top of your checking account," Jiang said. "That [Privacy] card number looks like any regular Visa debit card to the merchant. The merchant takes that [virtual card number], and passes it on to the merchant's payments processor. That message goes to Visa, and that message then gets passed on to us. If we confirm the transaction, then the merchant captures the funds, and then we ACH debit the funds out of your checking account."

Smaller Might Be Better

While consumers might be wary of trusting a small company with their cybersecurity, Jiang and Privacy chairman Andy Roth, a former American Express Company AXP Chief Privacy Officer, have built security into Privacy from the very start. Jiang contrasts this mentality with that of a larger company, which might not have a holistic security-focused approach.

"Ultimately security boils down to mindset within the organization," Jiang said. "I think there is actually an understated advantage to being a smaller more modern organization. There is less surface area for potential attacks from hackers. We have generally less software to be updated and the benefit of not having to deal with legacy old systems."

However, Jiang is quick to note that no organization is 100 percent breach-proof.

Privacy - A Fundamental Right

Roth left his C-suite position at American Express to pursue the idea behind Privacy, and hopes the company will raise awareness around digital privacy rights as well as protect consumers.

"I really believe that privacy is a fundamental right," Roth said in an interview with Benzinga. "I [hope in the future] our company will have an impact on raising awareness about digital rights and help people to do basic things to protect themselves."

Privacy's revenue comes from a cut of fees that go to Visa from online transactions.