Category: Uncategorized

[Dave Birch] It’s a tenuous link to identity, but I thought readers might be curious about an initiative launched by the British government last week. Apparently we have a Minister for Crime Reduction and said minister (Mr. Vernon Coaker) has begun “new moves to break the link between mobile phones and crime” with a workshop where key players from the mobile phone industry — such as manufacturers, networks, academics and law enforcement — were challenged to imagine how the multi-functional handsets of the future can be redesigned to be less tempting and less useful to thieves and criminals. Amongst other objectives, the minister wants to know “what can be done to prevent criminals using phones to facilitate crime”. There’s nothing like aiming high.

My idea (patent pending) is that when you want to make a phone call, you have to punch in your national identity number first. Then, the phone company will check with the government to see if you are a criminal, and if you’re not then an IVR will ask you to clearly state whether the call you are going to make is for criminal purposes. If you say “no”, you’ll get a dial tone. If you say “yes”, then you will be sent a text message asking you to proceed to your nearest police station — during office hours only — and turn yourself in.

Technorati Tags: fraud, mobile, security

Continue reading “They like a challenge”

[Dave Birch] Steve Mott, whose opinions I always value, wrote an article arguing that so far as US payment cards are concerned, security went wrong many years ago when the industry decided not to go to PIN. Of course, outside the US the migration to “chip &PIN” is steady if not spectacular. But it’s not making a big difference overall, because fraud is migrating to remote channels. He says this is testing” the resources and will of an industry still reluctant to abandon the gravy train of fees and interchange to commit to safer, better, and cheaper alternative payments”. He goes on to point out that the spends about a dollar in prevention for every $10 they lose in fraud, which he compares to the health care industry that has three times as much fraud but spends less than tenth as much on fraud prevention. My reaction to reading this was to think how the payment card industry might spend its anti-fraud budgets more effectively, but I don’t think that was the main point. The main point was that we’re not doing very well against fraud at a time when we’re introducing contactless payments and trying to shift transactions online. Perhaps one of the reasons is that by offering zero liability to consumers — no matter how reckless they might be — “a generation of consumers has been trained to disregard safe practices for use of financial accounts”. Steve says that…

it’s time to throw out the blanket zero-liability paradigm and get legitimate, responsible consumers to put some skin in the security game, too. The good ones appear to be ready to do what’s needed to protect themselves. Consumers who can’t should get restricted account access. Those who won’t should bear the specific costs of their misbehavior instead of loading their burden on the backs of the vast majority of responsible transactors.

Interesting, and different to my plan to make it the both the issuers and customers problem by changing the law so it’s not illegal to use someone else’s card. My plan delivers zero fraud, instantly.

Technorati Tags: credit cards, debit cards, fraud, payments, retail

Continue reading “Distributing liabilities”

[Dave Birch] Why are we all so interested in Japanese e-money statistics? Setting aside that when I say “we”, I of course mean “me”, it’s because of the clues it may contain to the evolution of electronic money in a rich mobile-centric environment. According to the Nomura Research Institutethe Japanese e-money market grew from 180 billion yen in 2006 to 690 billion yen in 2007, including EDY’s 100 billion yen share and Suica’s 50 billion yen share. The market is expected to be worth 2.8 trillion yen in 2011. With the spread of e-money, concerns have been raised that the money supply –one of the elements that the Bank of Japan uses to map out its monetary policy — may not reflect the actual state of the economy, as the money supply data does not include e-money (and nor, I suspect, does anyone else’s, although I’d love to hear from anyone who can prove me wrong).

Technorati Tags: e-purse, mobile

Continue reading “Japanese money supply”

[Dave Birch] A number of industry observers in the UK expressed (eg, Kable) some surprise that the government’s estimates for the cost of the proposed national ID card scheme have gone up, despite the fact that the Home Office had announced that it was not going to build a new “gold standard” database but use some other databases (that already exist) and that it was no longer going to capture and store iris biometrics. The previous home secretary, John Reid, had said that this new approach would save money. Anyway, all of this means that the government needs some more ideas on how to recoup the cost of the scheme, especially since charging people thirty quid for the card is not a terribly popular approach. Nor is their plan to charge companies around 60p a time to check details held on the identity database. They hope for up to 770m ‘verifications’ each year. In fact, between the cost of the cards and the charges for verification, the Home Office forecast that the scheme will essentially be “self-financing through fee income” , although I’m sure if that income includes the income from fines (2.5K for not registering and 1K for notifying a change of address). I was wondering this because in the case of another high-profile local scheme, the Transport for London congestion charge, a common criticism of the scheme is that it relies on the income from fines rather than fees (and still has a 10% evasion rate). According to the publicly available figures for 2005, motorists paid £120 million in congestion charges and a further £70 million in penalty charges, but (according to an AA spokesperson)

In many cases these were not deliberate non-payers. They just didn’t understand the scheme and as a result were landed with £100 fines.

Technorati Tags: identity

Continue reading “Paying for identity”

[Dave Birch] The outlook for contactless cards continues to look pretty bright, with the 109 million contactless card users expected in the US by 2011. Some recent figures put 2006 spending on contactless cards at $15 billion (which looks like around $7-8K per card to me, which seems a little high) with the percentage of retailers having contactless payment systems expected to nearly triple within two years, so the transaction volume will continue to climb healthily. I don’t say card volume, of course, because they may not be cards. Our friends at Glenbrook have being doing a survey at their payment boot camps asking people how they would like to pay for small purchases (eg, coffee) given the choice between a contactless card, a keyfob, their mobile phone or their fingerprint. The winner? The mobile phone with 46% of votes, followed by cards without signature (27%), finger print (15%) and fob (12%). I think you’d get an even stronger preference for phones outside the US, frankly.

Technorati Tags: cashless, contactless, mobile

Continue reading “Contactless charge”

[Dave Birch] Our good friends at Safaricom in Kenya have allowed us to share some up-to-date (and really rather positive) figures from the launch of the M-PESA scheme that we have been working on there. For those of you not familiar with the service, it’s based on secure text messaging and aimed at the more than 80% of people who are excluded from the formal financial sector there. Apart from transferring money from person to person – a service in demand from urban Kenyans supporting relatives in rural areas – customers of the Safaricom network can also keep up to 50,000 shillings (£370) in a “virtual account” linked to their handset (well, SIM actually).

Technorati Tags: mobile, p2p, remittances

Continue reading “Aid budget”

[Dave Birch] Virtual worlds, digital money and mobile, all in one story! ! It’s all about the Japanese virtual world S! Town, run by Softbank Mobile, which attracted 100,000 subscribers in its first couple of months of operation. In S! Town, subscribers design and dress their avatar and room, using the virtual world’s currency for purchases. Friends share pictures, download music and meet friends in the public plaza. There are community events like treasure hunts, which often have monetary prize incentives that serve to give subscribers more currency to personalize their avatar and digs. That’s what’s great about virtual worlds, everyone’s happy. Well, I say everyone. I mean everyone except the regulators, spoilsports that they are.

Technorati Tags: p2p, regulation, virtual worlds

Continue reading “A story that has everything”

[Dave Birch] I was thinking about my day out at the Forum Oxford conference on Future Technologies, in Oxford. I won’t go over all of the presentations since you can go via Forum Oxford to pick them up (and get involved in the discussion) but they did provide food for thought and I appreciate Ajit and Tomi’s efforts to create a novel kind of cross-media "watering hole" for those of us kindly referred to as "opinon formers" in their introduction.

Technorati Tags: identity, mobile

Continue reading “Dreaming spires, etc”

[Dave Birch] I gave a talk about prepaid cards recently and it was very clear from the questions I got afterwards that they are central to many organisations strategies.  I wasn’t surprised when MasterCard Europe released some new figures estimating that spending on prepaid payment "cards" (my quotes, because by 2010 some of the prepaid transactions will via phones, keyfobs, watches and goodness knows what else) will reach $164 billion in three year’s time.  The research they commissioned shows that the UK will be the biggest single market for prepaid cards and the Russia and Poland will have the highest prepaid penetration (at 13-14%, compared to 8% for Germany).  One of the reasons for the bullish prediction is the increasing use of prepaid cards by governments to pay benefits.  Note that for comparison, the US market is predicted to be $296 billion, Japan $59 billion and the UK $34 billion at the same time (which means it will be the fourth largest market).

Technorati Tags: prepaid, retail

Continue reading “Prepaid in Europe”

[Dave Birch]  I was in a conversation about spam yesterday and it made me reflect on my friend Peter Cochrane’s observations about the economics of spam.  These are sophisticated: as Peter points out, there are already wholesalers of botnets.  You can actually buy the capability to become a total pain in the bum to millions of people.  The spammers have realised they can get through even multiple filters through sheer volume.  If your filter is 97 per cent efficient, then the volume that gets through is still huge enough to fill your inbox with tripe. And it is that volume is a problem – it is jamming the net and as a result we are all losing efficiency.  Filters, no matter how good, cannot be the answer because they can always be defeated by volume.

Technorati Tags: identity, internet, management

Continue reading “Is it spam if I keep saying it?”