CBDCs are everywhere – and nowhere. Everyone is discussing them, but almost no one is actually deploying them. Sure, this is in part due to the early stage thinking that is going into working out what is actually required but it’s also due to the tricky business of actually working out how they would be implemented. Developing a retail payment solution is a lot harder than creating a Central Bank backed payment instrument.
I had the privilege to chair a discussion about identity in the metaverse at the Identiverse conference in Denver in June 2022, and had great fun discussing the new landscape for identity with Heather Vescent, Jonathan Howle, Katryna Dow and Gopal Padinjaruveetil. In order to frame my thoughts and get the discussion about identity and privacy going, I needed a mental model.
This week, a press release from China announced they had expanded acceptance of the digital Yuan onto public transport in 12 cities. China has led the way in the development of a Central Bank Digital Currency (CBDC), launching a trial in 2020 which has been expanding steadily. But what does this mean? What is a CBDC? And when will I need to consider accepting them in public transportation?
A wallet is a way of organising things. My Apple Wallet, just like my real wallet, doesn’t have any cash in it. It has credit cards, debit cards, loyalty cards, vaccination records, boarding passes, train tickets and driving licences (Apple have just gone live with their driving licence and state in Arizona). These things are all held independently in the wallet: they don’t talk to each other and they don’t share data with each other. They are also, as you will have noticed, mostly about identity, not money.
Contactless Card Acceptance
Solutions to enable Android phones to be used to accept EMV contactless card payments without requiring additional hardware have been around for a while. We’ve been advising and helping our clients architect, secure, build and certify SoftPOS solutions for the last 5 years. However, this has not been possible on iOS devices, until now. Speculation that Apple was looking to add contactless payment card acceptance support to iPhone grew when they bought Mobeewave for $100MM in 2020. Based on the technology acquired in this purchase, Apple has recently added contactless card acceptance capability by implementing their Proximity Reader framework to iOS 15.4, for what Apple calls Tap to Pay.
At last week’s FDX Virtual Spring Global Summit, I received a glimpse into the huge strides being made by the Financial Data Exchange in the adoption of their data sharing API for the US market. In the context of minimal centralised regulation in the US, progress is driven by industry. This marks a substantial move away from screen scraping, which has historically been prominent in the US market. While the API approach provides value in terms of security and standardisation, many organisations still depend on screen scraping to support their business model.
Developing secure software and systems is hard. Even if the most experienced engineers use the best tools and follow best practices, bugs and vulnerabilities can slip through. Add to that the amount of legacy or 3rd-party code in use today, developer turnover and the use of outsourcing, and we can see that it is very difficult to eliminate all vulnerabilities from within a solution. This is why security by design and defence in depth are important principles. By designing-in security right from the start, and having multiple independent and overlapping methods of protection, the impacts of vulnerabilities can be reduced.
16 years on from PIN day (Valentines Day 2006) how is our relationship with PIN holding up?
Last year Dave Birch postulated that PIN was in decline and indeed no longer necessary as our mobile phones make use of various biometrics to authenticate us and our transactions, but as we often remind ourselves in Chyp, we’re not normal. UK Finance statistics tells us that whilst the use of Apple Pay & Google Pay at the Point of Sale is on the rise, the humble plastic card is still the preferred way to pay.
For Safer Internet Day, I thought I’d bring a Mediterranean theme. As a classicist, I frequently switch between ancient and modern, applying time-tested principles to emerging technologies. Plato had it right on data protection: the price of not participating in public life is to be ruled by less able men.