[Dave Birch] The relationship between identity and payments is something that we're going to be coming back to again and again over the coming year because it's central to the evolution of the payment space, particularly in the case of what you might call "non-traditional points-of-sale or points-of-service" (I haven't come up with a snappier name yet and "POS 2.0" or whatever sounds so 2009). Just to illustrate the range of problems that need to be addressed by getting this relationship right in these cases, consider a specific problem that we were involved in looking at about a year ago.
Suppose you have an electric car that you are driving around town and you want to stop somewhere and plug in to leave it charging while you pop off to do some shopping or something. (Apropos of nothing, it's a fascinating statistical fact that there are currently more electric car charging points in the UK than there are electric cars, but that's beside the point.)
Just 2,149 electric cars have been sold since 2006, despite a government scheme last year offering customers up to £5,000 towards the cost of a vehicle. The Department for Transport says that around 2,500 charging points have been installed, although their precise location is not known.
[From Flat battery: Government reveals there are more charging points than electric cars in UK as sales slump | Mail Online]
How is it going to work then? Do you just leave open power sockets all over town? That's probably not the answer because then people will just run cables out of their houses and plug themselves into the power sockets thus getting free electricity. You could probably imagine some system of combination locks or keys but that would soon become unmanageable. How could you control the keys so that only authorised drivers of authorised electric cars could draw electricity from the relevant sockets?
One way forward is to use some combination of tamper-resistant chips (e.g., a SIM), short-range wireless interfaces (e.g. NFC) and an identity infrastructure (e.g. NSTIC or IDA) so that people can pull up next to a charging point (that they can find using the GPS on their smartphone), tap the socket with the NFC phone (or a contactless card) so the socket opens or becomes live and then plug their car in. Then when they come back from shopping, they can unplug and drive off safe in the knowledge that their account has been charged correctly. Sounds a bit farfetched? Not a bit of it. I read that
Sony is working on power outlets that are able to identify a user and determine their permissions at that particular socket. With the quick tap of a card, phone or other NFC device your authentication info is passed to a server over the powerline itself.[From Sony prepping power outlet that demands payment, identification -- Engadget]
You can see how easily this could work and if it were to be built using the same standards as other applications on the same infrastructure it wouldn't be too expensive. Easily, that is, if there were any NFC phones out there. But since there are not, the system has to work using NFC cards instead.
Members of each scheme get an RFID card, which unlocks the posts and allows free use of them. However, if travelling between areas, multiple memberships are required. Prices vary, but Source London currently offers access for just £10 per year at present.[From Pay-as-you-go electric car charging arrives in North East England]
Given that the phones don't exist and the inexplicable use of proprietary cards makes these schemes regional, then surely the market will (exactly as in the car parking case study that I've written about ad nauseum) use the mobile phone to bypass physical interfaces: once again the phone as remote control to the cloud appears to be the solution.
Charge your Car, charge point network operator for the region, is trialling the new payment model under the 'Plugged-in Places’ scheme, and says the process is similar to paying for on-street parking by mobile phone. Drivers pull into a dedicated bay, text the Charge Your Car phone number and they’ll be charged accordingly.[From Pay-as-you-go electric car charging arrives in North East England]
Now you can how it would be much more convenient for consumers to simply tap at the power socket and plug in, but it's not that much more hassle to run the app and type in the location number. Text messaging isn't secure enough for generalised mass market payments, but its good enough to get transactions going and as it is gradually replaced by IP, apps and identities stored in trusted environments (more on this to come) it will form part of an interoperable identity-centric ecosystem for transactions.
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