[Dave Birch] Wow. The feedback that I’ve been getting about the Consult Hyperion Digital Money Forum is fantastic. I’d like to claim all the credit, but I just can’t. So for those of you who weren’t able to join us, I thought I’d try and explain why it worked so well and to give credit where it is due.


I’m always very clear and honest about our motives for running the Forum. Consult Hyperion is a consultancy, not a conference company. We run it as a not-for-profit event (which this year supported BUFFER, Action Medical Research, Jubilee Action and the Prostate Cancer charity) to reinforce this point. As a consultancy, we have a reputation for helping our customers — who range from Transport for London and the Bill and Melinda Gates Foundation to Barclaycard and First Data — to deliver new products and services using new technology for secure electronic transactions. We can’t generate all of these new ideas ourselves, so we use the Forum to explore, to question, to connect, to understand and to play with the boundary between new technology and business, and I think we succeed in doing all of these things and having fun at the same time. But why was it so good?

First of all, it’s the sponsors. Visa Europe have been supporters of the Forum for some years and they share our commitment to genuine discussion and debate, genuine learning about the future. They’re not interested in a bunch of marketing slides any more than we are, and as the main sponsor they provided not only money but encouragement and ideas. I can’t thank them enough. Our supporting sponsors, ACI Worldwide (who paid for the entertaining pub quiz, drinks and prizes) and Olswang (who paid for the speakers’ dinner and the books we gave out) were fantastic and enthusiastic. ACI Worldwide have been with us for many years and their forward-looking attitude is much appreciated. Our content partner CGAP not only suggested some speakers and panelists who delivered outstanding input but helped us to develop an important part of our thinking about the role of electronic payments in attacked financial (and therefore social) exclusion. Thanks to all of them: their support gave the event a head start.

Secondly, it’s the speakers and panelists. I try very hard to choose people that I personally respect and I also try very hard to bring together people who can help to make us all think by their combination or juxtaposition in order to exploit the nature of the event. Since it is always limited to a hundred people, there is plenty of scope for interaction and discussion once the speakers have set the tone.

Sometimes, though, even I am surprised by how well this works. I’ll give you two examples from this year.

The kick-off session that was a launchpad for the event so good that people were still talking to me about it two days later. It made us at look like geniuses for the brilliant juxtaposition of Tom Levenson and James Allan, but the truth of the matter is that James was due to present at last year’s Forum after I‘d blogged about him back in 2008 but was unfortunately ill on the day, which was why he was speaking this year instead! However it happened, though, it was an outstanding session. Novelist Martin Baker as chair and two speakers, with no Powerpoint, keeping an audience engrossed, entertained and stimulated for 90 minutes.


Tom told the wonderful story that I touched on back in January, laden with resonance for these troubled times, of the collapse of England’s medium of exchange and the subsequent revolution at the Mint under Sir Isaac Newton, a short period in our history where the framework for today was laid down: the industrial Mint and the Bank of England. Commerce was crippled because there was no cash, but by the time Newton died the City was on incredible trajectory. James Allan’s decision to try and live in London with no cash, using electronic payments only, was voluntary but no less illuminating. Personally, I found the most surprising part of his story was that fact that one transaction in two years that he was forced to conduct in cash was not the desperate purchase of £1 bottle of water at a pop concert or the fiver to a desperate mate but the UKP2,000 deposit for apartment rental to landlords who didn’t trust e-banking (so they said: many in the audience voiced the suspicion that this was all about tax evasion).

The second example was the expert panel on innovating out of poverty: with CGAP’s help I had brought together DD Dedo, the largest branchless banking agent network in Columbia, easypaisa in Pakistan, Ghana’s main mobile operator, a key regulator from the Philippines and (again by utter chance) an expert researching London’s migrant communities. Together they provided such a comprehensive, fascinating and inspirational perspective on the incredible impact of new technology on financial services for the poor that you really could have heard a pin drop while they were talking and the questions could have gone on for days. Again, it was the different perspectives that made the session.

I won’t go through the entire programme, suffice to say that I, along with many other attendees, came away with a raft of new ideas to think about from smart banknotes through mobile-owned banks to energy-based currencies. Joe Di Vanna‘s helicopter view of the impact of digital money, Ignacio Mas’ passionate exposition of the Financial Services for the Poor programme, Michael Salmony‘s defence of cash all played their part. Enough from me: here’s what other people actually said about it:

  • “Thank you so much for the absolutely wonderful two day experience of the Digital Money Forum 2010.”
  • “A huge thank you for including me in the forum, I met some really interesting people.”
  • “An eclectic mix of speakers ensured there was no room for boredom and it was a really thought provoking and enjoyable day.”
  • “Your fantastic Digital Money Forum.”

The final piece of the jigsaw was everyone who came along. We have a very well-informed audience from a very wide spectrum of interests and they played their part too: if you scan the delegate list you’ll see banks, telcos, non-bank payment organisations, business people, charities and NGOs, inventors, entrepreneurs, lawyers, consultancies and even the IMF. It’s this mix that generates the energy clearly visible in the room and makes the coffee, lunch, tea and drinks breaks so pleasant. I’m passionate about the potential from cross-fertilization and I’m convinced to provides a direct benefit to our customers.

I’ve already been asked if there will be a 14th Forum next year and the answer is, of course, yes.

Showcase for new payment ideas

[Dave Birch] As part of the 13th annual Digital Money Forum in London on 10th-11th March 2010, we’re going to have a some fun with “The Dragon’s Factor’s Got Talent”. We’re inviting new companies in the payment space to come along and showcase their ideas in the form of a competition: they will each get to make a 10 “elevator pitch” to the audience (with no slides or visual aids). At the end of the Forum they will then be “judged” by an expert panel who will award a prize to the pitch they think most likely to succeed as a business. So we’ll have fun, we’ll see some new ideas and perhaps see a new business get international attention. We’ve already shortlisted a couple of companies, and we’re looking for more.

If you’re going to be in London on 10th-11th March 2009 and you’d like to present your idea for a new retail e-payment product or service to a great audience and distinguished panel, get your “application” to me as soon as possible and we’ll choose a somewhere in the region of six to eight shortlisted pitches. If you’re chosen for the shortlist, youll get a free delegate place at the Forum and we’ll even cover a room for the night at the conference hotel so that you can stay and join in the fun.

Raising the Bar

[Dave Birch] I thoroughly enjoyed the first two BarCampBank “unconferences” in London in 2008 and 2009. So much so that I have persuaded my colleagues at Consult Hyperion to support a third which is very kindly being hosted by PayPal UK at their offices in Richmond, west London, on Saturday 30th January 2010. I know that persuading people to travel to the far reaches of Greater London on a Saturday might be difficult, but let me tell you why I’ll be going.

James Gardner is absolutely correct that the lack of a set agenda is the power of the BarCamp format

[From Digital Money Forum: BarCampBank “near money”]

The agenda is set on the day by the people who come along. Personally, I’ll be interested in discussions about decentralised finance (community credit, local currency and so forth) as well as the innovative use of new technology to provide services via mobile devices, but my experience of the previous BarCampBanks was that I found myself sitting in on discussions I had no idea I would be interested in, and I’m looking forward to the same this year. I’m shameless about my motivation: our customers expect us to come up with new ideas, and one excellent way to obtain new ideas is by cross-pollination between sectors, products, services and strategies. The BarCampBank is, frankly, an easy way to do this. So if you have ideas about the future of financial services, thought on the changing role of the financial services sector or you just want to kick some ideas around with some different people, I look forward to meeting you there.

Calling payment startups who want a bit of attention

[Dave Birch] You know we like to try something new every year at the Digital Money Forum. As part of the 13th Forum in London on 10th-11th March 2010, we’re going to have a kind of talent show for entrepreneurs and inventors with new ideas in the retail electronic payments field. It will be called “The Dragon’s Factor’s Got Talent” and will involve a number of people making “elevator pitches” of 10 minutes each with no slides, sprinkled throughout the two days. At the end of the Forum they will then be “judged” by a panel comprising an entrepreneur, a VC, a business person and a payment expert. The panel will award a prize to the pitch they think most likely to succeed as a business, the audience will award a prize for the best pitch. The attraction, (I hope) for the contestants is that if their ideas are any good, they will get attention from people who can make them happen. So we’ll have fun, we’ll see some new ideas and perhaps see a new business launched.

We’ve already had our first contestant confirm, and that was after a mere mention of the idea in passing, so I think we may end up having too many contestants. Hence, if you’re going to be in London on 11th March 2009 and you’d like to present your idea for a new retail e-payment product or service to a distinguished panel, get your “application” to me as soon as possible and we’ll choose a somewhere in the region of six to eight shortlisted pitches. If you’re chosen for the shortlist, we’ll even cover a room for the night at the conference hotel so that you can stay and join in the fun.

For all you utter bankers

[Dave Birch] Wow, that was excellent fun. Nothing really to do with electronic payments, but I’ve been playing a fantastic new card game called “Crunch: The Game for Utter Bankers” with the kids and some friends.

Crunch is a satirical card game for 2 to 4 players that places you at the head of the boardroom as a CEO of a global bank juggling the conflicting demands of your ailing bank and your future retirement fund. An average game sees you bribing your way out of government investigations, fending off aggressive takeovers and forcing debt onto the unsuspecting public. Meanwhile, reward your hard work by taking inappropriate bonuses and – when no one’s looking – brazenly embezzling your bank’s own funds and hiding them about your person.

[From Crunch – the game for utter bankers | BoardGameGeek | BoardGameGeek]

The game served a dual purpose, both of which left me delighted with it. First of all, it was fun to play. Basically, you build up your bank’s lending against assets (ranging from shares in listed companies to Nazi gold) and then when a crunch comes you trade in trust for government bailouts. It didn’t take long to learn, and both the kids and adults enjoyed it. It had an unexpected second purpose, though. I bought it for fun, but in playing it the kids asked a lot of questions about the credit crunch, about the relationship between assets and debt, and about the idea of deliberately growing your workforce and assets to become too big to fail (adding “workforce” cards also gains you “trust” cards).

Run, don’t walk, to your nearest games shop — I got mine from Playin’ Games in Museum Street opposite the British Museum — and pick up a copy of this super game.

Federal Trade Commission disclosure. I have no affiliation with Terrorbull Games, the creators of “Crunch”, and have received no payments nor any other form of remuneration related to this endorsement. No animals were harmed during the writing of this blog post.

Bear market

[Dave Birch] Russia is looking like a pretty interesting market for e-payments. The management consultants keep telling us to focus on the BRIC (Brazil, Russia, India and China) for our next growth markets, but it’s important to understand that their mass, retail, e-payment markets are just not going to be like ours, partly because of industry structures, partly because of government direction and partly because of the technology starting point.

Russian central authorities are reportedly considering plans to set up an electronic payments network… The main objective of the prospective electronic payment system would be to challenge the dominance of established brands such as MasterCard and Visa, which currently hold around 85 percent of the Russian cards market. The plans for a Russian-operated electronic payment network come after in June 2008, Russia’s two largest banks – Sberbank and VTB Group – have teamed up to create the United Russian Payment System (URPS).

[From The Paypers. Insights in payments.]

What might the Russian “third scheme” look like, compared to a European “third scheme” (eg, PayFair)? Well, one reasonable prediction might be that the lack of infrastructure in Russia (Russia is a very big place) means that their third scheme might well jump ahead of the European third scheme in terms of its technology platform. Indeed, there are already strong indications that mobile and contactless technologies will be moving ahead quite quickly in that environment.

The head of Russia’s largest bank briefed the country’s President Dmitry Medvedev on the concept of mobile contactless payments last week — and explained that he is looking to launch a non-contact mobile payments system by 2011/12.

[From Russia looks to introduce mobile contactless in two to three years • Near Field Communications World]

A national contactless purse (perhaps a bit like NETS in Singapore or Touch n’Go in Malaysia) in a country the size of Russia would be a really interesting development. Singapore has shown that some judicious government steering can help to migrate to a contactless environment that is convenient for consumers who will…

…now have two payment cards to choose from to use on buses and trains, to pay for road tolls and carparks, and to make purchases from stores, eateries and entertainment outlets. On Friday, Nets (the Network For Electronic Transfers) launched its long-awaited multi-purpose contactless card… EZ-Link launched a similar contactless multi-purpose card in January.

[From Nets, more uses than one]

Transit is the vanguard, as always, but the point here is that competition to provide interoperable e-purses is at least a good step forwards.

Spanish practice

[Dave Birch] Mobile payments are developing in some pretty interesting ways at the moment. While we tend to think of mobile payments as being some sort of replacement for our familiar plastic cards, this is only one part of the market. In some parts of the world, retail is not the focus, and mobile money transfer has become a serious business and it’s already beginning to connect the developed and developing worlds. There’s no doubt in my mind that this will be one of the most important uses of the technology, in terms of improving the lives of the most people: making it possible to move money around means inclusion and financial services where there were none before.

Vodafone, Safaricom and Western Union have announced that they will partner to pilot a cross-border Mobile Money Transfer (MMT) service between the U.K. and Kenya.

[From Payments News: Vodafone, Safaricom, Western Union Partner for Mobile Transfers – December 08, 2008]

So you can now use your mobile phone to send money from one country to another. That’s not to say that retail payments are not participating in the mobile revolution. If you look at countries such as Japan and Korea — which I stress are not templates for the rest of developed world, but we can see them as testbeds for certain technologies that will inevitable spread — mobile payments are part of the mainstream. There, it’s the mobile operators who have been driving change and, while using mobile proximity payments to buy cups of coffee have long since ceased to be novel in those markets, those operators are continuing to drive innovation. Oddly, given the focus in the press, one area where contactless payment technologies may have great impact is not in stores but on line.

SK Telecom subscribers, who can already use the “T-Cash” mobile payment system to pay for bus fares, grocery products and parking tickets, will now also be able to purchase goods and services from the Internet… Since launching the service earlier this year, SK Telecom said it gathered more than 200,000 users of T-Cash. The mobile wallets are used for paying bus, subway and taxi fares, buying items at 24-hour convenience stores, and paying for parking at a number of major facilities such as Seoul Station, Gimpo International Airport and Seoul World Cup Stadium. T-Cash will now be accepted as payment at 11th Street (www.11st.co.kr), an online retail and auction site operated by SK Telecom, and Cyworld (www.cyworld.com), the country’s most popular social networking service, operated by SK Communications, the Internet unit of SK Telecom.

[From Mobile Payment Extended Online]

I wrote, four years ago, about Cyworld and its role in shaping next generation payments. In the Korean market, the Cyworld connection is particularly significant. So why isn’t the activity and energy from the developing world and from Japan and Korea yet having any impact in the mass market in Europe or the US? Well, one clear reason is that it has taken a long time for the GSM world to sort out standards and put the development of handsets on a firm roadmap. And although the standards have firmed up (in fact the GSMA got the standards it wanted) there’s still only a couple of handsets out there. A few months ago, the GSMA called for NFC to be delivered in to the mass market, well, round about now.

The GSMA, the global trade group for the mobile industry, today called for full NFC functionality — including the standardised ‘Single Wire Protocol’ interface — to be built into commercially available mobile handsets from mid-2009, in order to ensure that consumers can reap the benefits of mobile payment services as soon as possible.

[From GSMA Calls for Pay-Buy-Mobile Handsets]

It’s taken a lot longer for NFC to get near the mass market than many of us thought when the first experiments began four or five years ago. But it does at least seem that it’s now practical to begin thinking about the new businesses that will emerge when we combine the GSMA roadmap with the laboratory results from Asia and the game-changing business models from Africa. I’m getting more enthusiastic about NFC as the days go by.

What’s the use case?

[Dave Birch] Suppose you did have a virtual identity that did something for you that was so useful that would actually pay for it. What kind of thing should it do? At the Forum Oxford Future Technologies seminar I heard Mark Curtis of Flirtomatic say something along the lines of "we would happily use mobile operator age verification services if they worked". This struck me as a very simple, prosaic example. Just as in the physical world there are a couple of age verification schemes where teenagers can buy cards that show them to be over 18, perhaps the online equivalent would be the place to begin.

Now that people like Facebook are getting on board with OpenID, perhaps one idea might be to a create an OpenID source that supplies IDs with a single credential IS_OVER_18 and two-factor authentication. This would be, effectively, one of Bob's LLPs. Where would you use this? Well, one of the long standing mass market problem area is social networking. There have been attempt to deal with this piecemeal.

Mobile social networking service Funky Sexy Cool is offering identity verification to all its members at no additional cost, says Tim O’Connor, CEO of the New York-based company. But members have to choose to go through the process. Funky Sexy Cool enables members to find other like-minded individuals in the same geographic area to hang out with. For example, a member can send out a message to his friends saying he’ll be at a certain club or bar… Funky Sexy Cool is using ID verification technology from IDology Inc., Atlanta. IDology searches public databases to confirm an identity [and] charges about 37 cents per ID verification.

[From Social networking sites have little to no identity verification : CR80 News]

Now teenagers would, naturally, want to obtain the 2FA "device" of an older sibling or friend in order to gain access to sites, but it's not like using fake ID to buy a beer, because they'd end up logged in not as themselves but their sibling, friend etc which isn't much use in social networking.

Virtual identities and LLPs

[Dave Birch] Over the Burton Group, Bob Blakely has been developing a line of thinking around a particular kind of virtual identity that he has called the Limited Liability Persona, or LLP and he recently posted some ideas for more specific characteristics of such a thing that I think deserve reflection. Bob's thinking is that since the invention of the limited liability company as a distinct legal entity the economy has grown and benefited, so there might be economic advantages to recognising some form of virtual identity as a distinct legal entity.

Well, since LLPs don't really exist yet, it's hard to be too specific. But in principle an LLP is a legal entity with a name:

  1. Created by an action of a court.
  2. Owned by one or more individuals.
  3. With its own resources distinct from those of its owners.
  4. In which owners can invest new resources.
  5. With its own "identity attributes" distinct from those of its owners.
  6. Whose actions are legally distinct from those of the owners (though the owners may be held accountable for those actions.
  7. Whose resources may be transferred to its owners.
  8. Which can be sold by the owners to new owners.
  9. Whose existence can be terminated by its owners.
[From Burton Group Identity Blog: The Limited Liability Persona]

This is very close to the idea of the virtual identity bound to a digital identity that we have discussed here before but with much firmer purpose. In Europe, as is many other jurisdictions, the relevant digital signature legislation already exists so that legally-binding digital signatures can be used and by inference legally-valid digital identities created. It's easy to see how Bob's ideas can be implemented except for the transfers part. If an LLP is a virtual identity that is, in essence, a public key certificate then it cannot be transferred. It must be deleted and a new virtual identity created: so let's say there is a virtual identity "Chair of Manchester City Fan Club" that it my public key signed by Manchester City Fan Club's private key. Then, when a new Chair is elected then my certificate has to be revoked and a new certificate created (ie, the new Chair's public key signed by Manchester City Fan Club's private key). So the particular attribute "Chair of Manchester City Fan Club" ends up bound to a new digital identity (key pair).