As banks desperately try to lower their risk at the point of sale, a San Jose startup is working to create a device ID and authentication scheme that it hopes will eventually reduce fraud.

Zumigo (the founder liked the sound of that name: 'Zumigo. Here we go!') started selling financial services companies on its plan this year.

At the Tick-Tock diner, down the block from Hammerstein Ballroom where the FinovateFall conference took place this week in New York, the startup's head of product management David Pinski excitedly explained the method.

"We're pairing your phone to a card transaction," says Pinski. "I go and find you wherever you are and try to connect the signaling network" and the bank.

In 2009, Zumigo began as a marketing company that let advertisers send targeted messages to smart and feature phone owners after figuring out their location.

The company's technology relies on a plug-in to a series of carrier protocols that gives Zumigo the ability to track people within 100 feet — after they opt in, of course. There is also no need for a separate location-finding mobile app.

In February 2012, Zumigo raised roughly $1.3 million in an initial round of investing. Pinski says the company's Series B will close before the end of the year.

The former Capital One employee, once responsible for scouting startups and their services for the bank, joined the company in March.

Not long before, Zumigo started focusing on selling to banks. Today, there are six U.S. banks running pilots with the early-stage company. Pinski is of course skittish about mentioning which banks (he assures they are "big").

Some are using the technology while onboarding customers — pairing registered phones in a customer's home when she's logging on. Others are leveraging Zumigo for its original use, marketing.

"In every institution that we have talked to, especially the large banks, the right hand doesn't know what the left hand is doing," says Pinski. "At the end of the day, banks are looking at both services [fraud and marketing] and it's a matter of working your way into both departments."

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