The ZTIC (rhymes with stick) is IBM’s latest payment schtick (haha) designed to protect online card transactions from fraud. Without going into a lot of the detail which you can [1] read here, this USB gizmo, when inserted into a PC, enables transactions to go thru it rather than the traditional online channels. It was designed to overcome the fear that many consumers have of doing their banking online.

Except that I am not sure that I see the problem that they are attempting to solve. CheckFree’s [2] latest survey of online banking penetration in the US anyway pegs it at almost 70%. Online banking seems to be doing just fine on its own.

But even if there was evidence of an issue with the adoption of online banking, it’s not clear that this gadget would solve the problem. If people don’t trust data going thru their computer, why would they trust it passing thru a device that is connected to it? I can see explaining how to use this to my parents who unbelievably at 73 use online banking (they also just discovered Facebook, but that’s a different story..) Seems a case of cool technology for technology sake and not a real solution that adds value to the consumer experience.

Perhaps the ZTIC should take its cues from Sharper Image who was in the business of gadgeteering only to find itself bankrupt when they introduced self-branded cell phones and dysfunctional, overpriced air purifier. What would be refreshing is if the focus of innovation could be pegged to the value that it delivers to the entire ecosystem, not just the engineers who get a kick out of building cool new toys. Maybe one benefit of the market meltdown is that businesses will no longer have the appetite (or money) to fund these kinds of projects and we can all get back to the basics of what innovations will really drive revenue.

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