Category: Uncategorized

[Dave Birch] I was on a train, in the UK today, and I was in the line at the buffet car trying to buy a couple of coffees.  The guy in front me bought a drink and a pastry, which came to 2.10 and all he had was a ten pound note.  The guy serving didn’t want to take the note because it would use up all of his change, so he asked the customer to pay by card instead.  Which he did.  And he signed for it, because it wasn’t a chip and PIN terminal, even though it was clearly working off line.  How much easier life would have been if the customer had used one of these new "contactless" credit cards that I heard about on the BBC this morning while I was getting ready.  The supreme irony, of course, is that I paid my 2.90 with the exact change.

Technorati Tags: cashless, coins, contactless, credit cards, EMV, payments, transport

Continue reading “Transport tales”

[Dave Birch] Well, the book has actually arrived.  Ta da!  I now exist in Amazon space, and I still can’t get over how exciting it is.  What’s more, someone who started reading the book actually liked it, and when they told me so I had a frisson of understanding as to why authors do it.  It may well be that "No man but a blockhead ever wrote, except for money", but it really does feel good.  Anyhow, here’s the key link…

"Digital Identity Management: Technological, Business and Social Implications" (David Birch)

Technorati Tags: identity, management

Continue reading “Goodness, this is exciting (but possibly only for me)”

[Dave Birch] I got a nice surprise in my inbox: someone sent me an e-mail telling me that my guru rating just went up substantially.  I followed the link and found something fun.  It goes back to when I made a presentation to a client, a couple of years ago, that included a mock-up of a Blizzard Entertainment Visa card with World of Warcraft rewards instead of "real" world rewards, suggesting that this might be a good first step toward linking real and virtual world strategies.  Well, guess what.  It just happened.  Naturally, I won’t be publicising any of my really bad ideas.  To be honest, nine-tenths of guruhood is hindsight bias anyway.  But on this one, I expect to dine out for some time.

Technorati Tags: credit cards, government, loyalty, MMORPGS, money, payments, regulation, virtual worlds

Continue reading “Rewarded at last”

[Dave Birch] It looks like more of our attitude to money may be down to DNA than we might think.  I rather enjoyed the story in many of the papers yesterday concerning the discovery that the experience of losing money is processed by the brain in a similar fashion to pain and fear, which may well explain the reasonably well-known phenomenon that people dread financial misfortune more deeply than they value gains.  Perhaps it’s time to add a new category to the blog, "neuroscience.

Technorati Tags: money

Continue reading “The e-selfish gene”

[Dave Birch] Linkdump pointed me at McKinsey’s "golden rules" for the "war on cash". These are:

 

• The stakeholders must agree that substituting debit cards for cash is beneficial to society (This consensus will be hard to reach, as the parties involved do not agree on the true costs of cash and the other payment instruments involved).
• The debit product must be enhanced.
• Acceptance of debit cards must be vigorously promoted, both in terms of personal acceptance of cards and in the world of remote commerce (mail and telephone order, e- and m-commerce).
• Banks must develop segmented card offerings.
• Cash needs to be priced appropriately.  The fact is that, today, the pricing of cash is not in line with its costs. Consumers and merchants in most countries do not pay the real cost of cash, and so merchants and consumers have no reason to reduce their use of cash.  One problem is that there is no clear ownership of cash. Another is that governments often position cash as a public good — to be offered free by banks — thereby inhibiting an economic debate on cash versus other instruments.
• Finally, we will need to see significant targeted marketing efforts to promote debit over cash.

If by "debit" they mean debit products, pre-authorised debit products and prepaid products, then I think I agree with all of these points, especially the ones about segmentation and costs.

Technorati Tags: cashless, debit cards, SEPA

Continue reading “More from the war on cash”

[Dave Birch] I can testify to the fact the the IRIS system at Heathrow was broken again this week.  I’ve been flying quite a bit recently, and I can’t actually remember the last time that it was working.  Surely one of the fundamental problems — as people like me are always saying — is that it is doing a 1:N match against a central database instead of a 1:1 match against a local token (such as an e-passport, which they are already issuing but without any useful functionality for citizens).  Whenever the communications get interrupted or the central database crashes, the whole scheme is out.  Anyway, I was mildly annoyed this time because I had to stand in an even bigger line than usual to get through UK passport control and I was in a hurry because the plane was late arriving.  I did consider pretending to be an asylum seeker from Madeupistan, because I thought that line looked shorter, but in the end I just stood in line and waited and fumed.

Technorati Tags: biometrics, government, passport

Continue reading “Identity and government identity”

[Dave Birch] Over on the Digital Money blog, one of the topics we’re obsessed with is the collision between mobile phones and contactless technologies in the form of Near Field Communication (NFC).  But in the long run, the use of NFC phones to manage digital identities will probably be more important.  I think this is pretty clear to see given the rolling standardisation of the mobile/NFC space and the shape that is taking.  This isn’t just the standardisation of the NFC interface, but also the mobile environment around it such as the SIM, where the addition of NFC support and a high-speed USB connection to the phone will transform the use of handsets.  As I’ve said before, though, the addition of the the NFC interface together with access to that interface through standard interfaces within the phone is genuinely revolutionary.  It integrates the handset into its local environment, making the mobile phone a link or pivot between the local and the global.  It therefore will have big role to play in the use of digital identity in the future.  The current projections (these change all the time) are that 20%  of mobile handsets worldwide will include Near Field Communication (NFC) technology by 2012, according to New York-based ABI Research and in the digital money world many players are already preparing for that market.  Visa, to pick just one example, believes there is a great opportunity to migrate some of the purchases being made by consumers today to the mobile phone.  A Visa survey showed 67% of American males between the age of 18 and 39 would be interested in buying an NFC-enabled phone, while 57% said they would be willing to pay more for an NFC phone than a regular model.  If the phone is going to become the average person’s wallet, then surely it can function as passport, driving licence and home banking log in device as well.

Technorati Tags: ID cards, mobile, nfc, passport, PKI, security

Continue reading “We don’t need no stinking NFC phones”

[Dave Birch] Within all of the coverage of Barclays decision to start issuing 2FA "token authentication" devices to online banking customers (eg, me) to combat phishing and fraud, there were a few people pointing out that this kind of 2FA isn’t a magic bullet, specifically because of "man in the middle" attacks.  We’ve discussed this before in the context of token authentication, but the problem extends to many other kinds of 2FA (basically, any 2FA that doesn’t implement end-to-end encryption).

Technorati Tags: identity

Continue reading “Attacking 2FA”

[Dave Birch] Then you’ll first want to check out the top 10 places to hide it around the house.  But for how much longer will you be doing this?  There are people out there who want to create an economy free of paper money and coins.  The revolution (Money 3.0?) has already started.  Millions of consumers rolling through tollbooths without stopping, their in-car transponders beaming information to an RFID (radio frequency identification) reader and triggering a process by which tolls are transferred from a credit card or bank account to the highway authority.  Millions more use SpeedPass devices to pay for gasoline, simply waving a key fob in front of a reader built into a gas pump, paying for gas without every opening their wallets.  Millins more have started to use contactless payment cards for small purchases.  The technology is now here, but how long will the cultural change take?  Tim Attinger, SVP Product Innovation and Development for Visa USA (who describes himself as being in charge of ridding the America of cash and cheques) says that the next frontier is to delete even the plastic from "plastic".  He says "I dream of a day when kids on the corner selling lemonade will take Visa payments".

Technorati Tags: ATM, cashless, payments

Continue reading “If you must use cash”

[Dave Birch] Cash really is a waste of money.  In the U.S.A., the government has been losing money of every new copper coin, as the costs of producing a one cent coin is about 1.4 cents.  Now, because of the cost of nickel, the five cent coin now costs 5.73 cents.  This makes minting coins an astonishingly bad business: it may well be unique in the amount of value destroyed in the production process.  I wonder if there’s a business school course somewhere about managing businesses with negative added value: the final product is actually worth less than it’s raw materials.

Technorati Tags: costs, payments

Continue reading “Negative added value”