Smart Card & Identity News A New Flavour for eCash

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Smart Card & Identity News Published monthly by Smart Card News Ltd Head Office: Smart Card Group, 12 Meadway, Rustington, BN16 2DD Telephone: +44 (0)1903 734677 Website: www.smartcard.co.uk Email: info@smartcard.co.uk Researcher– Patsy Editorial Everett Researcher – Patsy Everett Technical Researcher – Dr David Everett Production Team – John Owen, Lesley Dann, Adam Noyce Contributors to this Issue – Conie Mutters, Ian Hermon, Eli Hizkiyev, RBR Photographic Images – Dreamstime.com Printers – Hastings Printing Company Limited, UK ISSN – 1755-1021 Disclaimer Smart Card News Ltd shall not be liable for inaccuracies in its published text. We would like to make it clear that views expressed in the articles are those of the individual authors and in no way reflect our views on a particular issue. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means – including photocopying – without prior written permission from Smart Card News Ltd. © Smart Card News Ltd Smart Card & Identity News • March 2012 Patsy Everett Our Comments Dear Subscribers, Once more the annual Digital Money Forum clicked into life in London’s east end on the 28/29th March. Mine host David Birch was his normal self, shaking the tree of established thinking to see if any interesting apples fall out. Of course they always do, it’s whether you notice it at the time! Anette Brolos from the Copenhagen Financial IT Region (CFIR) got the day rolling by discussing their project in Denmark that is looking at the future of money and their vision of a cashless society. Denmark of course was very early into the game with the Dankort (debit card) and Dancoin. Anette reminded us that cash costs about €26 Bn to manage in Europe and the impact that this has on business. As has been pointed out in our lead article this month the cost of cash is often hidden away because it’s not obvious who is paying the bill. But we know this, don’t we? But also there is the environmental burden, the impact of crime and isn’t money just plain filthy? We are always hearing about how much cocaine you can find on a standard used currency bill. However not to be put off Anette seems clear that one day there will be a cashless society (more or less) brought about by a number of scenarios of which social development will be a substantial element in our future. It goes without saying that technology will also have its say with mobile wallets, NFC, bar codes and the like. But Anette ended with a closing thought by telling us that according to a Danish national bank study, cash is four times more expensive to use than the Danish debit card (Dankort). Now here’s the thing, if this is true and we hear similar figures for the UK as well as the rest of Europe, who is promoting the continued use of cash? Of course everybody will tell you it is the criminals, organised crime and the like that need the anonymity and fluidity of cash to harvest their crimes. We might mention the grey economy (it just sounds better than black) which everybody seems to do that gets you a lower bill if you pay in cash or if you really don’t want people to know what you are doing and you really don’t want to be traced. I want to suggest that this is actually only a part of the story, behavioural economics comes into this in a bigger way than you might imagine. The truth is that people don’t like change. There is an old tale that tells you that promoting radical new ideas are at best ignored but in general are heavily criticised and resisted by those with established positions. Only a small number of people follow a vision and they are usually the ones closest to the evangelist. Sometimes this can of course create a church of followers and this was perhaps the greatest talent of Steve Jobs. If I’m right on this with the unfortunate demise of Steve, then Apple has reached its pinnacle and only has one way to go. You can do experiments in the laboratory to show that all of this is normal human behaviour. 2
What I’m hinting at here is that there are a large number of players who are not motivated to a cashless society in the visionary way and that obstacles are likely to appear that will slow progress in this area. So the challenge here is to identify the source of the vision, is it the consumer, is it business, is it the government? Who is it that really wants a cashless society? Answers on the back of a postcard please before the price of the stamps goes up by 25%. Gill Ringland from SAMI Consulting brought up my favourite subject of what happens in 2050? Of course we don’t know and back to behavioural economics we are lousy at predicting what is likely to happen. However here I have a method, if in doubt you need to study your science fiction books have a look at how they are paying in the year 2050 – they aren’t, there I’ve given you a clue, in 2050 we don’t need to buy things we just exist in some environment where what we need is just provided. So wandering around the universe in our space ship, you name it, we’ve got it. I’ve got carried away here, this is not what Gill said at all, she was into the Washington Consensus originally from the economist John Williamson in 1989 which is all about the economic prescription for developing countries or at least that’s what he intended, will that hold in the future or will we be into some new paradigm? I can’t leave the forum without mentioning David Wolman who has written about ‘the end of money’ as we know it, see his book on Amazon and also Marc Brule from the Royal Canadian Mint on the future of currency. How’s that for two extremes but actually if you read David’s book you’ll realise it’s not and we have talked about the Royal Canadian Mint in our headline article this month. Exciting times, it reminds me of the 90’s, lots of things are happening in our space. The smart card chip might be well established but the applications surrounding mobile phones, NFC, barcodes and tablets well that’s a whole new universe. Patsy. Contents Regular Features Lead Story . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Events Diary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 World News In Brief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5, 9, 12, 17 Industry Articles Overall Growth in CEE Cards Market Masks Contraction in Several Countries . . 7 Making Money on the Move More Secure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Indian GSM Phone Networks Fail to Meet Basic Encryption Standards. . . . . . . . 16 Events Diary April 2012 19 Mobile & Contactless Payments - www.smi-online.co.uk/training 24-26 Infosecurity 2012, Earls Court, London - www.infosec.co.uk 25-27 Cards & Payments Asia, Suntec Singapore - www.terrapinn.com/exhibition/cards-asia 25-27 Prepaid Cards Asia, Suntec Singapore International Convention and Exhibition / / 3 Smart Card & Identity News • March 2012
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