Category: Uncategorized

You’re fingered for it

22nd May 2008by Consult Hyperion1 Comment

[Dave Birch] There’s no doubt that consumers aren’t as adverse to the use of fingerprints for applications such as retail payments as security experts worry that they might be. In fact

Six-in-10 consumers worldwide believe they will be able to pay for purchases using fingerprints by 2015, according to the report New Future In Store from TNS.
[From Consumers give thumbs up to biometric payment – Talking Retail]

Not that I think that we should pay much attention to what the public think about anything (after all, a good portion of them think that Sherlock Holmes ws a real person) but I’m sure they are right about biometrics, but wrong about fingerprints. One obvious problem that I can foresee is that retail POS will become (as in the case of PINs) a place to steal cardholder verification details. Then consumer’s fingerprints might end up in all sorts of strange places. I wonder if the German japesters the Chaos Computer Club haven’t done us all a favour by inventing a splendid new sport based on biometrics. You’ll recall that they

published digital copies of the German Home Secretary Wolfgang Schäuble’s fingerprints in their magazine. This was done in protest over the increased use of biometric data, for example in biometric passports and airport immigration. Apparently they lifted the original fingerprint from a glass that the Secretary used during a conference. Over 4,000 copies of the magazine were published, which also included a thin plastic film which could be stuck onto one’s finger in order to provide a false biometric reading, and pretend to be Herr Schäuble.
[From Chaos Computer Club Publishes Fingerprints of German Home Secretary – Securethoughts]

In practice, I’m sure that the first use of this tactic for criminal purposes won’t be to impersonate an important official. What on Earth could you gain access to with the Home Secretary’s fingerprint? I didn’t notice biometric fingerprint readers at the door of no.10 the last (and, in fact, only) time I went there. No, it will be to get someone random person’s fingerprint and put it at the scene of a crime to set a false trail or start a cover up or something similar. If I were going to murder someone, I’d wear gloves and leave your fingerprint at the scene of the crime.

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Awards and ceremonies

21st May 2008by Consult HyperionLeave a comment

[Dave Birch] Not really anything to do with Digital Money, but I’m one of the judges for this year’s CNET UK Business Technology Awards and they are looking for nominations in a variety of categories (see below) so I was wondering if any Digital Identity Denizens had any suggestions for payment-related products and services. If any of you have other suggestions then do scoot over to the web site and fill out a nomination form.

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Wise during the event

14th May 2008by Consult HyperionLeave a comment

[Dave Birch] The CSFI has just published its Banking Banana Skins survey. This a survey they conduct from time to time. It involves talking to bankers, regulators and observers (eg, consultants, analysts etc) to find out what should be keeping bank bosses awake at night. The no. 1 risk this year is “Liquidity” (which, incidentally, didn’t even make it into the top 30 last time) followed by “Credit Risk”. As I know nothing about banking, I can’t comment except to note that these seem like reasonable choices for the top two places. So why was I reading it.? Well, I always like to look and see where payment systems are in the list. After all, they’re what keeps me awake at night (some of the time) and I’m curious to see if the bankers share my obsession. Well, the headline is that whereas payment systems were 29th in 2006, they have moved up two places and are now 27th, so we can expect more management attention (and resources?) in the future. Not at lot more — the resource allocation does not follow the risk curve, but the risk/reward curve — but more.

It puts a spring in my step to know that tomorrow I’m going to see bank to pitch for some work in their 27th most important area of concern. Oh well.

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Cashlessness experiment (not what you think)

6th May 2008by Consult Hyperion2 Comments

[Dave Birch] I gave a talk on cashlessness to the London Futures Symposium a couple of weeks ago so I thought I’d do an experiment and put the presentation on to to Slideshare to see if anyone is even vaguely interested in looking at it. Let me stress — once again — that these are my personal opinions so I have taken the Consult Hyperion background out and put another one in! Anyway, if you like to take a look, I’d love to have your feeback…

| View | Upload your own

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e-Dictum meum pactum

2nd May 2008by Consult Hyperion2 Comments

[Dave Birch] There’s a story about identity in The Economist magazine that I read on the plane to Washington ("My bow is my bond", p.98, 26th April 2008) that connects directly with something I’m working on for a client at the moment. Naturally, neither the client or the assignment will be discussed here, except to note that I’ve been playing around with some ideas on value-adding identity services for the mass market. I’d also recently received an e-mail from an august body, which won’t be discussed here either, asking if I’d like to provide (for free!) some ideas on how to get private companies to use the U.K. identity card: I ignored the request, of course, but I did jot down a few notes. For both of these reasons, the story caught my eye.

The story concerns a fraud against Lehman Brothers in Japan. They lent a Japanese company $350 million, The load was guaranteed by a well-established Japanese trading house. Bankers from Lehman met an executvie from the trading house — at the trading house’s office — to sign the contract. When the firm in question defaulted, Lehman went to the trading house to get their money, but the trading house claimed no knowledge of the deal. The executive had been an imposter and the contract was fake. When someone gives you their business card, you assume that it is true (by custom and practice — you don’t explicitly validate it) and when they put a letterhead in front of you, you take it to be real. Oops.

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Blowing our trumpet

29th April 2008by Consult HyperionLeave a comment

[Dave Birch] I’m still bathing in the reflected glory of the 11th annual Digital Money Forum — I think the glow is going to take a few days to subside.

All I did was pester a few people into coming along to talk, chair and sit on panels. All of the actual hard work was done by Gloria Benson and her team: Jessica Mastromarco and Samantha Coultrip front of house, Katie Facey and Scott Demichele in the back, James Sellwood orchestrating and Linda Holloway at HQ. I can’t bear the shame of taking their credit any longer, so here’s a very public thank you to all of them.

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In search of the agnostic chip.

19th April 2008by Consult Hyperion4 Comments

Mobile phone operators missed the mobile payments boat, and card schemes and retail banks are now finding themselves in the position where they could soon rule the waves. It was inevitable that they would eventually arrive; it wasn’t necessarily inevitable for the telcos to give way, but whilst there was a taste for it, and the telcos wanted to have a go, they did give way. All things considered, however, the voyage has only just begun.

How do you make mobile payments work? You stick a chip with an antenna inside a mobile phone case (maybe incorporate it into the battery) and off you go. Wave the phone at a POS and Wooosh!! Instant payment. Had the telcos managed to develop a viable (and exciting!!) alternative payment system, this would have been just the job: the payment system would be operated by the telco, and would be delivered as part of the overall mobile proposition – 200 minutes, 500 texts and a payment application – thank you very much. Now that’s exciting!

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Museum pieces

16th April 2008by Consult Hyperion3 Comments

[Dave Birch] The Mu$eum of American Finance at 48 Wall Street makes for a pleasant diversion if you’re out and about in the financial district. I pottered around the various displays and wandered, drawn by an invisible force, into the “History of Money” gallery. At the very end of the gallery, in the final section dedicated to the future, was a picture of a Japanese mobile phone being used as a Suica card (Suica just announced that they now have a million users) and a Vivotech contactless POS terminal (see picture).

The label said something about contactless payments replacing money. Well, not in New York. Whereas my Barclaycard OnePulse Visa card (with PayWave) worked perfectly in Singapore, it hasn’t worked once in New York. At the Duane Reade drugstore, the attendant knew all about “Blink” cards and I happily tapped my card on the reader: nothing. My guess is that it’s an MSD-only reader, ignorant of worldwide contactless EMV standards. But I suppose it may just have been not working. That was the case at the AMC movie theatre where all of the contactless readers were turned sideways (the guy there said that they don’t work but he doesn’t know why). You can’t use contactless in the subway machines either.

I can’t pretend I’m not a little disappointed.

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A Question of Form

2nd April 2008by Consult Hyperion1 Comment

[Dave Petch] I was searching for articles on customer feedback on NFC-enabled Mobile Phone trials recently when I discovered what I thought was a very interesting comment from John Suchanec, the Senior Vice President of Payment Technology for Bank of America, regarding the bank’s own NFC trial that they carried out in late 2006 as part of a larger 5,000-employee pilot held at one of its corporate campuses:

The bank gave employees a choice of the contactless form factors they could use and employees chose key fobs to phones by a six-to-one ratio, Suchanec said. The application available for download to the phones was PayPass from MasterCard.

“Active fob users averaged three times more transactions than phone users,” he said. “One of the problems they had with the phone, you can’t do more than one thing at a time; you can’t talk and pay.”

[From: Contactless Technology in US Card ]

The article explains that one of the key issues reported during the trial was the complexity of getting the payment application to work in the NFC-enabled mobile phones (the Nokia 3220 model), including the slow download speed of the application, missed SMS messages and lost connections during the download process.

It piqued my interest because it would appear that many players in the emerging mobile payments industry have been and still are stating precisely the opposite i.e. that the mobile phone is the preferred form factor. Here are some examples.

When Consult Hyperion were working with MasterCard on the first U.S. field trial of mobile phones with contactless capabilities back in 2004, Motorola announced that:

“…recent MasterCard consumer research showed that consumers who found contactless payments to be extremely appealing, selected mobile phones, based on convenience and uniqueness, as a form factor of choice to be enhanced with PayPass."

[From: Motorola to Launch Trial of Handsets with MasterCard® PayPass Technology ]

In February 2007, the GSMA were saying this:

Several customer trials have confirmed that the mobile phone is the preferred form factor for contactless services. The demand for this new range of contactless services is applicable across all user and market segments. Furthermore, customers want to keep the same ease of use, “look & feel”, security and confidence as experienced with existing mobile services.

[From: Mobile NFC Services ]

In April 2007, the Retail Council of Canada published an article in the Canadian Retailer magazine which quoted Pat Daley from Deloitte:

“[A mobile phone] is the preferred form factor next to cards,” she says.

[From: 3,2,1…Contact(Less)! ]

Our own Dave Birch has consistently said that the mobile phone will be the ubiquitous payment / ticketing / loyalty / couponing mobile platform of choice when the numerous NFC trials have finally given way to a full-blown NFC ecosystem in the year 20-err…something. Many of his blog entries at http://www.digitalmoneyforum.com/blog/ are evidence of this.

So the question is whether Bank of America’s experience is similar to that of many other companies running NFC trials or an anomaly. The article states that the Nokia 3220 mobile was considered by the pilot employees to be unattractive and low on features, but it isn’t made clear whether the majority of the employees made their choice of fob over mobile before or after making this discovery. The key question would seem to be: Was their decision to choose a fob because of the mobile phone or despite it?

The pilot employees often chose a fob over a mobile because (as quoted above), “you can’t talk and pay”, and the reported result of this decision was that three times as many transactions were made on average on the fobs than the mobiles. But since paying takes a couple of hundred milliseconds is it really a big deal?

Is it really the case that, in everyday usage, the general public will want to be chatting to friends while they pay for their shopping? Will they consider this to be a key feature of their mobile device once it is equipped with all kinds of value added services? Perhaps in the field of transit or event ticketing there is a case to be made for “talking to your mate while walking through the gate”?

I think the key point here is that this limited pilot provided a single contactless payment application to the end user, not the fully-populated m-wallet that is highly likely to be the end result of this developing ecosystem. There is already much evidence that providing just mobile payment services alone is not likely to be the killer application for NFC.

Bank of America are very enthusiastic about mobile as a whole. The Bank has recently reported great success with the rollout of its Mobile Banking service, hitting the 500,000 user mark at the end of last year (more than all the other US banks combined), so at least something is going well for them in the mobile finance space.

[From: Bank of America hits half a million Mobile banking customers ]

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National identity scheme is about reducing crime

14th March 2008by Consult Hyperion2 Comments

[Dave Birch] In a meeting a couple of days ago, I was asked to explain the key purpose of the U.K. national identity card scheme. I wasn’t entirely sure, so I thought I would have a google around. PA Consulting, who were the Development Partners to the Home Office for the identity card scheme, should know and they say that the scheme is about reducing crime…

The biographic information recorded on the NIR is limited by law to basic identity information such as name, address, gender and date of birth. However, crucially, any attempt to steal an identity would need to be backed up by a matching identity card with associated biometric information (eg, fingerprints).
[From PA Consulting Group – 2007 – National identity scheme is about reducing crime]

This is correct, although the

Information that may be recorded in Register
[From Identity Cards Bill]

about a person actually includes his full name; other names by which he is or has been known; his date of birth; his place of birth; his gender; the address of his principal place of residence in the United Kingdom; the address of every other place in the United Kingdom where he has a place of residence; a photograph of his head and shoulders; his signature; his fingerprints; other biometric information about him; his nationality; his entitlement to remain in the United Kingdom; where that entitlement derives from a grant of leave to enter or remain in the United Kingdom, the terms and conditions of that leave; his National Identity Registration Number; the number of any ID card issued to him; any national insurance number allocated to him; the number of any immigration document relating to him; the number of any United Kingdom passport that has been issued to him; the number of any passport issued to him by or on behalf of the authorities of a country or territory outside the United Kingdom or by or on behalf of an international organisation; the number of any document that can be used by him (in some or all circumstances) instead of a passport; the number of any identity card issued to him by the authorities of a country or territory outside the United Kingdom; any reference number allocated to him by the Secretary of State in connection with an application made by him for permission to enter or to remain in the United Kingdom; the number of any work permit relating to him; any driver number given to him by a driving licence; the number of any designated document which is held by him and is a document the number of which does not fall within any of the preceding sub-paragraphs; the date of expiry or period of validity of a document the number of which is recorded by virtue of this paragraph; particulars of changes affecting information in the register and of changes made to his entry in the Register; his date of death; the date of every application for registration made by him; the date of every application by him for a modification of the contents of his entry; the date of every application by him confirming the contents of his entry (with or without changes); the reason for any omission from the information recorded in his entry; particulars (in addition to its number) of every ID card issued to him; particulars of every person who has countersigned an application by him for an ID card or a designated document, so far as those particulars were included on the application; particulars of every notification given by him for the purposes of (lost, stolen and damaged ID cards etc.); particulars of every requirement by the Secretary of State for the individual to surrender an ID card issued to him; the information provided in connection with every application by him to be entered in the Register, for a modification of the contents of his entry or for the issue of an ID card; the information provided in connection with every application by him confirming his entry in the Register (with or without changes); particulars of the steps taken, in connection with an application, for identifying the applicant or for verifying the information provided in connection with the application; particulars of any other steps taken or information obtained for ensuring that there is a complete, up-to-date and accurate entry about that individual in the Register; a personal identification number to be used for facilitating the making of applications for information recorded in his entry, and for facilitating the provision of the information; a password or other code to be used for that purpose or particulars of a method of generating such a password or code; questions and answers to be used for identifying a person seeking to make such an application or to apply for or to make a modification of that entry; particulars of every occasion on which information contained in the individual’s entry has been provided to a person; particulars of every person to whom such information has been provided on such an occasion; other particulars, in relation to each such occasion, of the provision of the information.

government, ID cards

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