New voice authentication technology is set to make consumer banking easier and more secure. But is it reliable?

Nick Ogden wants to make our online transactions easier. "People forget passwords," he says. They forget their pins. Ogden's new service, VoicePay, could help do away with both. VoicePay customers use their own unique voiceprint to authenticate transactions from their mobile phone, whether that's to check a bank balance or purchase their weekly shopping. "Voice biometrics gives you the same level of security as a finger print, iris scanning or DNA," he says. "And it's far more user-friendly."

But is it reliable? Last year's controversy surrounding SpinVox, in which the voicemail to text company was alleged to have relied on human operators to cover inadequacies in its technology, signalled to consumers that voice recognition software still had some way to go. Ogden says his product is market-ready. "We spent a year trying to break it," he says. "I put my cynic's hat on. It does work."

Ogden's expertise in payment processing stems from an early career in e-commerce. He started Wine Warehouse in 1994, before moving on to BarclaySquare, an online store for Barclays Bank, a year later. He developed the payment provider WorldPay in 1997. After RBS acquired the business in a hostile takeover in 2002 (Ogden is now attempting to buy it back) he says he was left with a feeling that as far as online payment systems were concerned, he "hadn't finished". He persuaded a selection of the old WorldPay team to join him in a new venture, Voice Commerce Group.

Ogden had already decided voice networks were the future. A year before RBS acquired WorldPay, he had attended a breakfast meeting with Michael Dell, where he met Bill Owens, who was running the satellite company Telesec. Owens told him, "the internet is still unnatural. It's not natural for everybody in the world to type. It is natural for everyone to talk." Ogden started thinking about how a voice-controlled Web might work.

Between 2003 and 2005, Ogden spent "north of $13m" trying to understand how voice networks might operate across the world. He set up a "testbed voice platform", which "does everything Skype does", pitching it to an imaginary customer, Mrs Smith from Acacia Gardens: "your mum, my mum, not a nerd, [someone] who will do things for a reason that seems natural." User-friendliness is vital for mass adoption, he says.

The voice recognition technology, which Ogden says is 99.4 per cent accurate, was developed in partnership with US firm Nuance, which earlier this month paid ú64m to acquire Spinvox. The software is similar to technology already used by the US military to authenticate radio communications. Voice biometrics is also used by US parole officers to ensure offenders are at home when they say they are.

The potential for commercial applications is huge, says Ogden. When a customer wants to pay on a VoicePay-enabled website, says Ogden, they don't enter any details apart from their mobile phone number. When the customer checks out, "we call you, a free call. You state your name. We say, 'if you want to proceed with this transaction please say voice signature'. The transaction is confirmed by SMS. The only information that goes back to the retailer is the shopping basket and confirmation that the payment has been made."

He says retail banks will begin rolling out VoicePay-backed services this year. "You may use your VoicePay account to authenticate into the call centre. You may use it to authorise online payments above a certain amount."

Ogden says Voice Commerce Group is applying to become principle members of Visa and Mastercard, which will allow the company to launch a VoicePay prepayment or credit card under its own brand, likely to be Cashflows. That card will only work "if you sign for it using your voice," says Ogden.

It's been a hard slog, but 2010, he says, "is set to be a great year". Voice Commerce Group is now a payment institution. "We are not a software company. We are regulated by the FSA," he explains. "We have a slide in one of our presentations that says, 'a regulatory opportunity', and those two words don't often go together."

The opportunity he's referring to came about in 2004, when the EU introduced the Payment Services Directive, opening up the banking network to non-banking companies. "It created a level playing field," says Ogden. "We used to own the domain, 'I can't believe it's not a bank dot com'. That domain is free again. Maybe we ought to go and get it."