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Future Battle: Financial Services vs. Wireless Operators

By Adam Theo in Technology
Sat Apr 20, 2002 at 05:04:16 PM EST
Tags: Focus On... (all tags)
Focus On...

As the wheels of my plane touch down on the runway in Denver, my cell-phone announces my arrival, signaling a message to the valet parking attendant to retrieve my car and bring it kerb-side. As I walk through the terminal, I find a Coke machine and point my phone at it. Typing in the number of the vending machine, I order a Coke, the price of which is added to my monthly statement. About that time, a slew of additional messages are also triggered, notifying my online calendar to place me back in Denver, and sending a text message to my wife that I've landed safely...

[Note: This story was originally posted to DigitalIDWorld by Andre Durand, not myself. I'm not fortunate enough to own a cell phone or a fancy car, let alone have a wife :-)]

As I approach my car, my cell phone and the car agree to unlock the doors and allow me entry. Recognizing who I am, it sets my seat and radio station for me, along with my desired temperature.

On the way home, I take the express lane through the toll booths; again, it's my cell phone that allows me to pass through the fast lanes without stopping to drop $.50 in the receptacle.

The concept that my cell phone represents not just a personal communications device, but a `communicating' personal identity utility, capable of helping me actually use my identity with other identities, is not a far-off concept. In fact, nearly everything described above is already being done in Europe and Japan using a combination of cellular and location based wireless services.

For extra portability, GSM and its SIM cards could be finally adopted by the US. This, with the SIM Toolkit, would enable developers to add and upgrade the applications that manage the wireless commands without having to alter the cell phone hardware in any way.

So where does this leave the financial services industry with their non-communicating credit cards and smart cards? What if the concept of a smart card that requires physical interaction with smart card readers represents just enough inconvenience that consumers leap-frog them in favor of their cellular/Bluetooth enabled devices, siphoning ecommerce transactions and cash micro-payment transactions to the wireless operator? But then again, there could be just enough security issues involved with an always-on, always-transmitting wireless device to keep consumers using the static smart cards.

I must admit the concept of having my `identity' tied to a device which can communicate is much more appealing than the concept of some sort of identity card. Adding Bluetooth local wireless communications capabilities to the smart-card only gets me so far and there appear to be many applications in which this added capability just simply will not suffice. So does this mean that some smart wireless operators will have the upper hand on the financial services industry in the coming years? Will the wireless communications device leap-frog smart-cards in every day use for micro-payment transactions? I think this is a distinct possibility Anyone care to take me up on a long-bet?


Voxel dot net
o Managed Hosting
o VoxCAST Content Delivery
o Raw Infrastructure


Who will have the upper hand in digital identity?
o Financial Institutions with Smart Cards (or other stop-to-use devices) 21%
o Wireless Operators with Cell Phones (or other communication devices) 29%
o Someone else 48%

Votes: 37
Results | Other Polls

Related Links
o originally posted
o DigitalIDW orld
o Andre Durand
o SIM cards
o SIM Toolkit
o Bluetooth
o Also by Adam Theo

Display: Sort:
Future Battle: Financial Services vs. Wireless Operators | 102 comments (66 topical, 36 editorial, 0 hidden)
Smart people, dumb environments (4.80 / 10) (#23)
by rusty on Fri Apr 19, 2002 at 11:43:07 PM EST

This reminds me of a train of thought that appealed to me from the days when I kept up with wearable computing. Basically, it's the "smart people, dumb environments" idea -- that instead of trying to engineer our environments so that they react to us (inert bags of water) and try to guess what we might want, we should engineer environments to react to particular broadcast signals, which we can choose whether and when to emit.

But then again, there could be just enough security issues involved with an always-on, always-transmitting wireless device as to keep consumers using the static smart cards.

That's the problem right there. This will work only if the wireless device is on and transmitting when I want it to be. That's why we'd stick with smart cards, after all: the freedom to choose when to be transmitting and when to be silent.

About the bet, I don't see why wireless operators won't just partner with financial institutions, to provide the transmission services, while the banks handle the actual transaction. For wireless companies to get into finance, they'd have to range very far from their core business, and build up the kind of trust and security banks have cultivated for centuries. I don't see that happening, when they could just sign a partnership deal and each do what they are good at.

Not the real rusty

Identity should be separate from everything else (4.72 / 11) (#26)
by Skippy on Sat Apr 20, 2002 at 12:00:56 AM EST

The container for your identity should be separate from any device but accepted by all of them. Maybe something like an iButton .I don't want my "identity" stored in my cell phone or anything else that can broadcast. My cell phone should, however, be able to accept my id from its container for broadcasting. The container for my identity should be as inert as possible. This means that I control, without any doubt, when someone or something can access information tied to me.

Hell, just as an idea, you could hold your identity in a ring so that you can just touch it to the device that needs it. It's convenient and signets might mean something again :-)

# I am now finished talking out my ass about things that I am not qualified to discuss. #

Agreed (4.40 / 5) (#55)
by andredurand on Sat Apr 20, 2002 at 01:35:19 PM EST

I was not advocating 'putting' your identity on the cell phone, simply using it to communicate it.

[ Parent ]
Could have been made a lot more clear. (nt) (4.00 / 4) (#69)
by Kaki Nix Sain on Sat Apr 20, 2002 at 06:52:57 PM EST

[ Parent ]
Not really going to be a battle (4.66 / 9) (#29)
by jlinwood on Sat Apr 20, 2002 at 12:55:53 AM EST

I think credit card companies would rather be out of the messy retail world of credit card fraud, lost cards, marketing, etc. They make their real money on interest charges from people that don't pay off their balance every month. Somebody is still going to have to provide credit services for mobile device transactions, and they will get their fair share of profits :)

I would love to be able to switch between credit terms for any transaction. Imagine purchasing something that costs 3 or 4 thousand dollars, and being given a list of financial service providers and their terms on a cell phone. Select the provider you want, and it's yours. Maybe you like the idea of 0 down, and payments over 3 years at 12%. Or you want zero interest for six months, and then a 21% interest rate. Hopefully this stimulates some creative thinking here.

One Device To Rule Them All (4.81 / 16) (#31)
by Dolohov on Sat Apr 20, 2002 at 01:33:56 AM EST

Gee, it looks like people really want to get to the point where their lives have a single point of failure. Right now, I'd have to lose my wallet, my key chain, my cell phone, and my PDA to be totally screwed, and even then I'd have the change in my pockets to at least make a phone call and buy a candy bar (Er, cheese crackers -- gotta watch the weight ;) To replicate the disaster that the author would suffer losing his cell phone, my pants would have to be stolen off my body with the contents of the pockets intact.

As for what it does for my digital identity... As far as I can tell, it redefines me as "The person/consumer who is supposed to be carrying this device, who has this list of recorded preferences." And instead of carrying potentially useful objects like coins and keys and credit cards, I get to carry a shapeless blob of plastic which suddenly causes all machines to recognise me and know my credit limit to the penny. That way, as I accrue more wealth, I can see that doors would (literally) open for me that would not open for anyone of lesser means. While it means that I will be treated more as a bank account and set of access codes than as a personality, it means that I can probably dress more casually.

That's all Phillip K Dick and stuff (3.25 / 4) (#35)
by humpasaur on Sat Apr 20, 2002 at 04:12:38 AM EST

That way, as I accrue more wealth, I can see that doors would (literally) open for me that would not open for anyone of lesser means.

When are they gonna make a movie based on one of his GOOD books?

*sigh* Must I explain FURTHER?
[ Parent ]

Too challenging (4.33 / 6) (#41)
by localroger on Sat Apr 20, 2002 at 09:18:17 AM EST

  • Three Stigmata of Palmer Eldrich -- War on Drugs has to end first
  • UBIK -- War on Drugs has to be totally forgotten first
  • Flow my Tears, the Policeman Said -- Someone has to get John Ashcroft hooked on LSD first
  • VALIS Trilogy -- Christian Right has to disappear into oblivion first
  • The Man in the High Castle -- Every special interest group with an origin in World War II, including the entire State of Israel, needs to be forgotten first

I can haz blog!
[ Parent ]

a movie based on VALIS (5.00 / 4) (#49)
by demi on Sat Apr 20, 2002 at 12:00:38 PM EST

would be very interesting, although the main problem with all of the books you list is that almost all of the drama is internalized. That format works fine with graphic novels but always translates poorly to the movie screen (although Fight Club had a very VALIS-like plot device). I mean, unless you took David Lynch's approach from Dune and had the characters narrating their own thoughts. Personally, I liked that approach, but others have vehemently disagreed. Nonetheless, it's been my ambition for a long time to write a good screenplay for VALIS, although it tends to diverge from being a coherent story at many points.

[ Parent ]

They could do... (4.33 / 3) (#64)
by humpasaur on Sat Apr 20, 2002 at 06:27:34 PM EST

A Scanner Darkly. That's one of my favorites. But you're probably right.

*sigh* Must I explain FURTHER?
[ Parent ]

It suffers from demi's point... (4.66 / 3) (#68)
by Kaki Nix Sain on Sat Apr 20, 2002 at 06:50:44 PM EST

... about internal drama.

It could look great and still fail utterly. Still I too would love to see someone with extreme talent try.

[ Parent ]

Don't Know (3.50 / 2) (#73)
by Dolohov on Sat Apr 20, 2002 at 09:54:20 PM EST

But I'll be first in line to see it when they do :)

I wonder how many of his books could be done as indie films? Probably at least a few, with some creativity.

[ Parent ]

GSM (4.00 / 3) (#32)
by Bad Harmony on Sat Apr 20, 2002 at 02:17:11 AM EST

Although it is popular in Europe, it isn't going to become the standard in the USA. My previous wireless provider ditched their GSM gear and switched to CDMA. GSM may replace some of the existing TDMA systems, but CDMA is not losing any market share to GSM.

5440' or Fight!

Not true.... (4.00 / 3) (#40)
by Zeram on Sat Apr 20, 2002 at 07:35:47 AM EST

AT&T is switching to GSM and GPRS for their new mMode service, which is modeled after NTT DoCoMo's iMode service.
Like Anime? In the Philly metro area? Welcome to the machine...
[ Parent ]
AT&T (4.00 / 2) (#57)
by Bad Harmony on Sat Apr 20, 2002 at 02:22:15 PM EST

AT&T is switching from TDMA to GSM, which is consistent with my original comment.

5440' or Fight!
[ Parent ]

yes and no (5.00 / 1) (#62)
by Zeram on Sat Apr 20, 2002 at 04:16:03 PM EST

they aren't TDMA in every market, just most...
Like Anime? In the Philly metro area? Welcome to the machine...
[ Parent ]
Voicestream (none / 0) (#87)
by fluffy grue on Sun Apr 21, 2002 at 10:39:34 PM EST

Voicestream is based on GSM; the (Nokia) phone I got last November is GSM, has SIM, etc.
"...but who knows, perhaps [stories about] technology and hardware will come to be [unpopular]." -- rusty the p
Parent ]
Increased security through sim toolkit (4.75 / 8) (#36)
by Lynoure on Sat Apr 20, 2002 at 05:15:34 AM EST

I would be against having any sort of key or ID functionality in the sim card as phones are among the most commonly lost items in the country I live in.

However, there are lots of nice features one could add by using sim toolkit. Some ideas:

By sending a code through sms you could cause some of the things below:

- your sim locks itself and the phone displays a message "This phone is owned by <your name>. Please return it to <location> for a reward"

- your phone sends a message declaring itself stolen. In countries where phone can be locked based on the IMEI -code, the phone will be then deactivated.

- if the phone has GPS functionality, it sends an sms back telling there it's located.

Just a detail... (2.66 / 3) (#37)
by doru on Sat Apr 20, 2002 at 05:33:16 AM EST

Aren't cell phones supposed to be turned off during take-off and landing ?

And I shiver at the thought that someone might steal your phone...
I see Rusty's creation of Scoop as being as world changing an event as the fall of the Berlin wall. - Alan Crowe

Actually they're supposed to turned off during... (3.50 / 2) (#43)
by Rk on Sat Apr 20, 2002 at 10:23:06 AM EST

the entire flight, since they allegedly disturb navigational systems. (VOR [if they still use that] GPS and/or ILS)

I don't think there's any definitive proof the mobile telephones are dangerous, but it's an FAA regulation, and the FAA prefer to be on the safe side. Probably so they don't end up being sued or accused of negligence.

[ Parent ]
I've tried it (3.00 / 1) (#45)
by demi on Sat Apr 20, 2002 at 10:55:19 AM EST

a couple of times, both before and after Sept. 11 (I noticed that people on the hijacked planes called their loved ones with personal cell phones). I went into the plane's bathroom and made some phone calls during the flight, it worked every time except once, and that was on a new plane which had some kind of *no calls allowed* warning (maybe a jammer like they have in some restaurants?).

As for the FAA regulations, I'm sure that one person doing the calling wouldn't be harmful, but maybe if 300 people were calling there would be a risk. Are you allowed to make cell calls in-flight in other parts of the world?

[ Parent ]

It won't hurt anything (none / 0) (#91)
by tzanger on Mon Apr 22, 2002 at 02:23:42 PM EST

As for the FAA regulations, I'm sure that one person doing the calling wouldn't be harmful, but maybe if 300 people were calling there would be a risk.

IIRC the main problem with cell phones in flight is that you can often reach more than one cell tower from your height. This causes much wailing and gnashing of teeth on the part of the cellular switching equipment as it tries to determine which cell to stick you in.

[ Parent ]
Upper Hands (2.00 / 3) (#38)
by underscore on Sat Apr 20, 2002 at 05:40:16 AM EST

There are few true *upper hands*. Most want just to get on with it, job, family, etal. Governments coerce and curtail big business as much as greed and the law allow. Really whether we're talking DigitalIdentity or the first firearms the few who chose to dominate do so by dint of their drive and fortune. Napoleon on the battlefield or Gates in the boardroom the few will dominate and the rest will follow.
a geek possessed of animal cunning
is a most fearsome adversary

A phone? It will be stolen or lost. (3.00 / 4) (#39)
by Tezcatlipoca on Sat Apr 20, 2002 at 06:14:12 AM EST

I am even bolder: there will come a time when you will have an initiation ceremony in which you are implanted with one chip that allows you to do all what you said.

There will be some rebels that will not accept the chip, but life will be so inconvenient without them that they will be a very small minority.

I am trolling today. I apologize for the inconvenience this may cause you.
Right! (3.00 / 1) (#44)
by bayankaran on Sat Apr 20, 2002 at 10:32:01 AM EST

You are correct. Cellphone is primitive, it will be better to point my chip implanted finger to do that.

[ Parent ]
My Fear Also (5.00 / 2) (#54)
by andredurand on Sat Apr 20, 2002 at 01:33:20 PM EST

The fact is, the entire digital identity discussion is a bit of a catch-22 for me personally. Convenience, security and efficiency in an electronically networked world are driving its creation and adoption and I believe at one level or another, it's inevitable. I got involved because I didn't like the approach which others were taking, knowing one day that I'd be a part of those systems. Put simply, the approach that current systems are taking is, "Trust Me or Trust Someone". Personally, I'd rather "Trust Myself" and others only optionally.

My wife's family typically refers to the business I'm in as "putting chips in people's brains". While at one level it's a bit funny, the fact is, it's neither funny to them and it's certainly not funny to me. It certainly is not what we're doing. If the Government comes in and says, "..to be a citizen, you have to have a Microsoft Passport account," that scares me. If we're going to have a digital identity system at all, I'd hope it ends up being one that we as individuals control.

[ Parent ]

Don't be so extreme. (3.00 / 1) (#67)
by Kaki Nix Sain on Sat Apr 20, 2002 at 06:42:31 PM EST

There are plenty of happy mediums for those that don't want the chips.

Proof by construction: A wrist watch that upon removal without removal.code waits five minutes and broadcasts "I'm probably stollen" signal.

[ Parent ]

I may be willing to accept that if ... (none / 0) (#72)
by Tezcatlipoca on Sat Apr 20, 2002 at 09:04:03 PM EST

... it was used to protect substantial property like cars.
I am trolling today. I apologize for the inconvenience this may cause you.
[ Parent ]
Do you mean that my example doesn't work... (3.00 / 1) (#74)
by Kaki Nix Sain on Sat Apr 20, 2002 at 10:00:52 PM EST

... because we don't already use such a system to protect cars?

If so, I don't see that as much of a objection. First, most people probably value their identity more than their car, so they would pay more to protect it with such a gadget. Further, cars just aren't in all that much danger of being stollen. The risk isn't high enough for the amount it would cost in money and bother to get something like this installed.

[ Parent ]

Already got that (5.00 / 1) (#77)
by rusty on Sun Apr 21, 2002 at 03:49:02 AM EST

Lo-Jac. Word is, they work really well.

Not the real rusty
[ Parent ]
Yeah... (4.00 / 1) (#83)
by Kaki Nix Sain on Sun Apr 21, 2002 at 05:33:53 PM EST

... I would imagine they work nicely. I think that the previous poster was questioning why we haven't all bought them already. Using the helpful stat on the Lo-Jac site, "one car is stolen every 27 seconds nationally!", and some back of the envelope maths I think we can see why.

  • 2 cars a minute
  • 275 million people
  • quick guess of a 1car/3people
  • thus, 45.8 million minutes to steal all the cars
  • figuring they will get to "mine" in half the time, for the average "mine" (no one complain about glossing over complicated stats issues, this is quickmaths).
  • looks like I can expect my car to be stolen in about 43 years.
Of course, the time measure doesn't really tell when my car might be stolen; I'd have to think a bit and probably drag out an old stats textbook to get a half-life type number on car theft expectations. But the 43 years number does tell us the sort of risk of car theft that we will all see when we look out at the world. I think.

Anyway, I'm thinking that a "protected by Lo-Jac" sticker for my car is a nice idea.

[ Parent ]

Better idea (4.80 / 5) (#46)
by dennis on Sat Apr 20, 2002 at 11:02:37 AM EST

it's my cell phone that allows me to pass through the fast lanes without stopping to drop $.50 in the receptacle.

Instead of my cellphone saying "this is Dennis, debit his account," I'd much rather my phone say "here's a little bit of digital cash, you can redeem it at any participating bank. No need to know who I am, just passing through."

Agreed (4.33 / 3) (#53)
by andredurand on Sat Apr 20, 2002 at 01:19:39 PM EST

This should absolutely be supported, and is likely the more appropriate way in which this particular transaction should occur.

[ Parent ]
Amen. (4.25 / 4) (#66)
by Kaki Nix Sain on Sat Apr 20, 2002 at 06:37:39 PM EST

That point was too good for me to silently give a 5.

While reading the article I kept thinking about the loss of anonymity. I'm sure the Office of Homeland Security would love it, but I'll not buy any such device.

The smaller company that makes one with several "silent running" modes will get all of my business. If there is no such company, then I think I may have just identified a good-sized, unsatisfied market to move into.

[ Parent ]

hmmm *ponders* (3.00 / 2) (#47)
by FiveHole on Sat Apr 20, 2002 at 11:38:58 AM EST

I thought this article would promote discussion. Frankly the idea which I've heard before troubles and intrigues me. However, until the phone is embedded within you, it is too easy to lose and hence the problem with this type of device having this much knowledge about you.

The Device is Dumb (5.00 / 2) (#52)
by andredurand on Sat Apr 20, 2002 at 01:18:21 PM EST

I'd contend that the device should know nothing about you. It's just a communications device. In this scenario, you will, at your choosing, identify yourself to the device and ask it to, on your behalf, identify itself, along with you, to other things that you might want to interact with.

[ Parent ]
But what happens (4.33 / 3) (#58)
by Solus on Sat Apr 20, 2002 at 03:07:51 PM EST

When you identify yourself to the phone, and lose it? Or it gets stolen? Either you're always identifying yourself to the device, in which case nobody would want to bother, or else the device "remembers" about you, in which case the security risk is extremely high.

There's probably some sort of happy medium; leases on the device? But still, if someone can swipe my phone and buy stuff, even a six hour window is waaaay too long, and anything shorter would be too irritating.

Until there's a reasonable biometric-identification scheme for devices I don't think the scenario mentioned in the article is practical.

[ Parent ]

Biometrics (4.33 / 3) (#60)
by andredurand on Sat Apr 20, 2002 at 04:11:27 PM EST

I surely don't have all the answers, however, I'm of the general opinion that a happy medium will indeed be found, one in which the security risk measurably low and the convenience still intact. Biometrics may play a role in this of course.

[ Parent ]
Biometrics the answer? (3.00 / 1) (#101)
by jacoplane on Mon Apr 29, 2002 at 01:18:30 PM EST

Aren't things like finger prints quite easy to duplicate? All you need is to shake hands with someone, and you've got their fingerprints.

[ Parent ]
The financial services industry is more adaptable (4.66 / 3) (#56)
by rickward on Sat Apr 20, 2002 at 01:36:57 PM EST

than you think. I predict that the first applications of wireless ID technology will actually be from banks partnering with cellphone providers.

Banks have not been slouches at pioneering new forms of payment (revolving credit, debit cards over credit network), and cellphone charges represent a large source of revenue for banks (after all, they do get a 2% cut from every monthly bill that people have charged to their card).

The general trend I have seen in my admittedly short lifetime is that your bank will do almost anything to let you take money out of your account.

"I hurt inside. I need sexual healing." --Slick from Sinfest

"Partnering" is bad. I want no part. (5.00 / 5) (#65)
by Kaki Nix Sain on Sat Apr 20, 2002 at 06:29:14 PM EST

It seems to lead down a road where, in order to buy a Coke, I need to be with Verizon and have MasterCard. But if I want a Snapple ... well, I'll need to pull out my SprintPCS phone that can access my Discover card.

Right, well those specific examples are probably crap because I don't know with megagiant corporations are in bed with which others, but I'm sure you can see the issue I've in mind.

Somehow this kind of bullet was dodged with email. A standard was developed and supported under the radar of the Big Players (or some other historical chain) that selected against the walled garden ideas that corporations like so much and tried to have. Instant messaging has not been so lucky and tearing down the walls aready up has consumed resources that could have been better used elsewhere.

I'm rambleing a bit, but my main point is that that 'partnering' can be very very bad for the people (fuck, I almost said consumers) involved.

[ Parent ]

Good point (5.00 / 1) (#89)
by rickward on Mon Apr 22, 2002 at 12:40:35 PM EST

I like your shopping examples, although I think the real conflict will come between retailers and payment companies. You can see this in the US now--some retailers only accept Visa and Mastercard, others take Amex and Discover, some take Carte Blanche or Diner's Club.

I like approaching invention as a function of markets (neccessity is the mother of, etc.) In this case, you could make a point that email and the Internet were produced in an ideal free market--every university had to have a system that operated basically the same to the end user, under much the same cost structures. The result was and is a commodity, in spite of AOL and MSN's attempts to differentiate their offerings.

Unfortunately for regular people, money is not and cannot be commodified.

[ Parent ]
Each of your points is wrong (5.00 / 5) (#78)
by Johnny Mnemonic on Sun Apr 21, 2002 at 03:59:58 AM EST

1. First application of wireless ID will be banks partnering with cellphone providers

ExxonMobil Speedpass, Sony EDY, Hong Kong Octopus etc etc

2. Banks have not been slouches

Au contraire, banks have been hopeless. Remember Mondex, VisaCash etc. Use Paypal vs. c2it as a case study.

3. The bank will do almost anything to let you take money out

Banks make no money on retail transactions. The statement should be "banks will do almost anything to lend you money".

[ Parent ]
HK Octopus (5.00 / 1) (#86)
by fluffy grue on Sun Apr 21, 2002 at 10:34:12 PM EST

Octopus is a great system. For those who don't know what it is, you just get this cheap (HK$20, which is about US$2) card which has an embedded identity chip (which isn't traceable to its holder in any way) which is powered by induction and keep it in your wallet or purse, and you just tap your wallet or purse against the turnstile and it works just fine, which is IMO a lot easier than having to dial a number for everything. :)

And yeah, lately banks have been doing whatever they can to stop me from taking my money out! Now they're charging an exorbitant "foreign ATM fee," for example, so on top of the $1.50 I have to pay the other bank for doing an ATM withdrawal, I have to pay my bank $3! I've stopped using my ATM card for anything but grocery shopping now. They also keep on randomly changing my account's terms under me without any notification, but by the time I notice them it's too late (because in part of the account agreement I can't complain about anything which happened more than a month ago, and of course I never find out about these things until two months later because they always take forever to get my statement to me).

I'd switch banks except that mostly I only use this account for storing my paycheck before I write another check to send it to my brokerage account, and this is the bank which has their ATM at the grocery store I shop at. So either I can go out of my way on principle, or minimize the amount of shafting I get...
"...but who knows, perhaps [stories about] technology and hardware will come to be [unpopular]." -- rusty the p
Parent ]

Visa is not a *bank* (none / 0) (#93)
by nsgnfcnt1 on Mon Apr 22, 2002 at 03:00:25 PM EST

Just so everyone doesn't get confused, Visa is not a bank. Visa is a vast brand/network utilized by banks to make financial transactions. And, if banks had their way, they would probably be rid of them because they have to pay fees to Visa to use the network.

[ Parent ]
Possible (5.00 / 1) (#88)
by salsaman on Mon Apr 22, 2002 at 09:08:12 AM EST

That is certainly possible. In a previous assignment, I was working with a company who had a rather ingenious business plan - they would work with a bank, and whenever a new customer opened an account, that customer would get a free mobile phone, WAP enabled with facilities to check their accounts and pay bills, etc.

[ Parent ]
Which company is this? (none / 0) (#90)
by rickward on Mon Apr 22, 2002 at 12:47:15 PM EST

Please let me know privately (via AIM or email--my first name at rickward dot com).

"I hurt inside. I need sexual healing." --Slick from Sinfest
[ Parent ]

Unfortunately (none / 0) (#96)
by salsaman on Tue Apr 23, 2002 at 05:21:53 AM EST

The company in question was a victim of the Great Dotcom Crash, or rather they could never get the funding to get started (fortunately I was working *with* the compnay, not for them). Shame though, it seemed like a good idea.

[ Parent ]
Or just telecoms acting as banks (4.00 / 3) (#94)
by nsgnfcnt1 on Mon Apr 22, 2002 at 03:13:55 PM EST

I believe some of the European telecoms are applying for banking licenses. Why partner with a bank when you can just be a bank and cut the middle-man out of the transaction? And, while they're cutting banks out of the loop, why not cut Visa/MasterCard/etc. out of the value chain too? The telecoms already have the billing network to do it. You could either just maintain your bank account with them or link your existing account to your cell phone/SIM.

This may work very well with micro-payments but breaks down, however, at the larger scale payments. At that point you're talking about rolling out entirely new payment hardware to retail stores which already have the infrastructure to handle credit cards. Doubtful they would want to purchase the new system or piss off Visa which exerts a vast amount of control over the payment chain (if not by regulation then by brand).

In the end I think the cell phone will make a nifty and convenient method of making micropayments. But, I think it will be supplanted by smartcards with RFID or similar technologies once Visa and the banks get in gear. Smartcards, complete with payment and digital ID info, are likely the way things will go as people are already comfortable with the card format. It's not just the technology that matters... it's how comfortable the people are with using it.

[ Parent ]
Speaking of toll roads/bridges... (4.00 / 2) (#70)
by gordonjcp on Sat Apr 20, 2002 at 08:00:08 PM EST

I've never understood why you couldn't used something similar to the transponders used on racing cars for timing. You could either have an account number burnt into it, or some sort of digital cash.

Give a man a fish, and he'll eat for a day. Teach a man to fish, and he'll bore you rigid with fishing stories for the rest of your life.

Common in the US (4.50 / 2) (#76)
by rusty on Sun Apr 21, 2002 at 03:45:01 AM EST

There's several varieties of that system -- EZPass being probably the most widespread. But that's how it works. You slow down to 10MPH or so, and just go through the lane. There's a little plastic box that you stick up on the visor or somewhere, and it just beams your account number through. I believe they charge your credit card or debit card monthly.

I'm surprised you haven't seen these. There's all over the US, but especially prevalent on the East Coast and near cities.

Not the real rusty
[ Parent ]

Possibly because I live in the UK... (4.50 / 2) (#79)
by gordonjcp on Sun Apr 21, 2002 at 04:33:43 AM EST

Where we don't have them yet. But then again, since we don't have toll roads either as such, that's not really surprising.
We do have the world's most expensive toll bridge though: The Skye Bridge. The crossing is about 1 mile long, and it costs about 5 *each* *way*. If you live there (I more or less do) you can get a book of tickets, but for that to be economical you need to travel off the island 10 times a year (there's 20 tickets, and they expire). It sucks. It also makes things like food really expensive, because hauliers have to add on the cost of the bridge (which is about 40 for lorries, last time I looked).
More info here...

Give a man a fish, and he'll eat for a day. Teach a man to fish, and he'll bore you rigid with fishing stories for the rest of your life.

[ Parent ]
Yeah (3.00 / 1) (#81)
by rusty on Sun Apr 21, 2002 at 01:42:06 PM EST

That's pretty expensive for a bridge. On the other hand, to get a car from Portland to my island, it's $60.00 on the ferry in the summer ($30.00 in the winter), which is a lot more than five pounds. It could be worse. :-)

Not the real rusty
[ Parent ]
Hmm... (3.00 / 1) (#82)
by gordonjcp on Sun Apr 21, 2002 at 03:25:52 PM EST

I'm guessing that the ferry crossing is a bit further than 1 mile, though. There used to be a ferry crossing here, until the bridge was opened. It was about 2.50 to cross on the ferry, but that jumped to 4.00 six months before the bridge opened.

Give a man a fish, and he'll eat for a day. Teach a man to fish, and he'll bore you rigid with fishing stories for the rest of your life.

[ Parent ]
It's about 2.5 miles (none / 0) (#95)
by rusty on Tue Apr 23, 2002 at 12:47:55 AM EST

But a bridge wouldn't be feasable. It would have to cross a very busy working harbor.

Not the real rusty
[ Parent ]
$60 is ridiculous then... (none / 0) (#98)
by gordonjcp on Wed Apr 24, 2002 at 05:47:20 AM EST

Bear in mind, though, that there is no other way on or off Skye other than the bridge, so they've got a pretty sweet monopoly. It's completely killed tourism, which was what the local economy more-or-less relied on.

Give a man a fish, and he'll eat for a day. Teach a man to fish, and he'll bore you rigid with fishing stories for the rest of your life.

[ Parent ]
E-ZPass payment system. (4.00 / 1) (#85)
by Kaki Nix Sain on Sun Apr 21, 2002 at 08:56:35 PM EST

They don't run a debt and then charge at the end of the month. Instead, they charge one $20 up front and then subtract the toll charges against that. They check every month and when the $20 has fallen below $10, they charge one enough to bring it back up to $20. Whenever one leaves the system, you get the balance back.

At first it struck me as an odd racket, but then I came to think it is a pretty good system all around. They don't have to take a precent of each transaction and can make money off the holdings. I temporarily don't have total control of $15 (on average) of my money for the convenience, but I can live with that. I'd be completely willing to do the same setup with other devices or services.

[ Parent ]

Affordability & Marketshare (4.33 / 3) (#71)
by elshafti on Sat Apr 20, 2002 at 08:39:08 PM EST

This story was originally posted to DigitalIDWorld by Andre Durand, not myself. I'm not fortunate enough to own a cell phone or a fancy car, let alone have a wife.

I can see this from a technology point of view but the great masses aren't going to buy/afford or use such a device, it would seem mostly suitable for business types and they are not the most technology savvy people around, take a look at tivo, great idea & technology but the baseline is that a)the end product is rubbish (tv), and the price is too high, look at the person who posted this he doesn't even have a mobile phone, ok, so you could argue for another device, but the marketshare is too small, I think for the idea to take off you would have to combine it with existing technology, thus it would allow you to pay for internet transactions, micropayments at brick stores, and the examples given above, it wouldn't need to store personal information, because you could have a top-up pay-as-you-go service, something the customers already has familiarity with, the obvious question is where the funding going to come from and what about fraud?.

I think I am learning to give up on the tragedy of not attaining perfection. -Persimmon

some comments (4.00 / 2) (#75)
by KiTaSuMbA on Sat Apr 20, 2002 at 11:38:08 PM EST

Sure, Digital ID can be very convenient and the author's example are only some (perhaps not even the best) of such an advent. However there is much thought to be done in regards:
Security: uniting everything that is you in terms of finance and citizenship in one single tech appliance is a very risky thing. What ensures us that once breached or even physically stollen, we will not cease to exist in society other than biologically. No money left, no identity, nothing. Never think that some networked appliance (or any appliance from a doorlock to a router) is 100% safe. The trick is that you don't have everything at the same place so even if you lose some of it, you don't lose all. Even more dangerous, is the use of digital ID in a wireless environment. Wireless networks are known to have some very serious security issues (from plain sniffing to connection hijacking).
Security is not the only issue here. I find that even if we should accept digital ID as a future event to come, open protocols, interoperability and absolute insurance that no corporate monopolia will form are critical for the discussion. Suppose you are provided with your ID by a product of corp. A. Then you should be able to:
switch to corp. B any time you wish
corp. C permitted to look at the protocols (and APIs) and built their own product
transact with corp. B and corp. C with your product of corp. A.
Current basic implementations of digital ID (Passport) are not compliant with the above, what makes you think this will change? Or should we accept to give all our digital rights to one big corp. A? (this sounds a bit too Orwellian to accept, sorry)

There is no Dopaminergic Pepperoni Kabal!
I don't want anything to braodcast my ID (4.66 / 3) (#80)
by anno1602 on Sun Apr 21, 2002 at 10:18:08 AM EST

I must admit the concept of having my `identity' tied to a device which can communicate is much more appealing than the concept of some sort of identity card.

No. It is much less appealing. I want to have control when and to whom I identify myself, if I choose to do so at all. A device which can broadcast it is prone to broadcasting it even if I don't want it to. With the card solution, I would have to physically insert the ID card into a reader, which leaves me the choice not to do it.

In today's world, in every day life, the only thing I regurlarly identify myself to is the ATM. I usually (except for large sums) pay cash, so I stay anonymous to the seller / vending machine / whatever I interact with. They don't need to know who I am in order to sell me stuff, and I don't *want* them to know. How is this ensured in your scheme?

"Where you stand on an issue depends on where you sit." - Murphy
choice (none / 0) (#97)
by j1mmy on Tue Apr 23, 2002 at 07:42:54 PM EST

I want to have control when and to whom I identify myself, if I choose to do so at all.

And there's no reason such systems couldn't allow the user to enable and disable broadcast mode.

[ Parent ]
You control it... (none / 0) (#100)
by andredurand on Sun Apr 28, 2002 at 07:47:09 PM EST

I didn't mean to imply that broadcasting your identity would be done without your explicit knowledge and instruction. You should have the choice to have it that way, or not.

[ Parent ]
just dreaming ? (2.00 / 1) (#84)
by mami on Sun Apr 21, 2002 at 05:50:03 PM EST

Wouldn't that mean we could point with our cell phone to a bomb in the next trash bin next door ? Then, after typing in the identification number of the bomb "manufacturer" and the bomb's ID, I could signal immediate payment from the bomb manufacturer's bank account to my checking account for my services to trigger the explosion ? This would amount to a real explosive revolution in the ID Technology, or not ?

oh well, sorry for that comment (none / 0) (#92)
by mami on Mon Apr 22, 2002 at 02:40:59 PM EST

How often do you read what you wrote yesterday and could just kick yourself into your own behind today ? For me it's daily ... may be, because I can't really reach my behind that well...

[ Parent ]
Should Exist (none / 0) (#102)
by toddboyle on Tue May 28, 2002 at 12:17:13 AM EST

What do you think would be the result, over a long period of time, if US arms producers continued working hard to produce smaller, smarter weapons, and began an commercial service, selling small bomb/ missile deliveries? i.e. anybody who had money, could order the bombs from a website, like mapquest.

I know this is an insane proposal but what do you think would be the result over a long period of time?

Let us presume that the first sales would be small bombs of approx. 10 KG, which could be delivered within a 1-meter accuracy at any point, on approximately 10 minutes notice. These would be gravity bombs with impact detonators, and the phenomenal 10-minute notice would be maintained by having aircraft in the skies 24 hours/day over the high demand regions. Let's assume the customer could redirect the impact location right up to the moment of impact, if he had some device capable of transmitting the geographic coordinates.

I imagine the service would have to be produced from an offshore location but it does not seem as complex as, say, launching missiles from Guyana or drilling oil on the north slope. The aerospace industry and logistics industries have done much more difficult things, and the technology is pretty much available internationally.

The service could be offered exactly like commercial products, for a loss at first but eventually, hoping to get up to a steady, profitable business. Countries capable of mounting a military strike on the bombing service's headquarters would not be in the strike zones. The service would only be offered within non-industrialized countries, in other words.

The republicans could do this, it would be a deregulation of the arms industry, you know...

I imagine the bombs could be produced and delivered well below $100, if you could get the volumes up to around 10,000 bombs in a 10 hour period. I say that because a jumbo jet can carry at least 150,000KG of cargo, and stay airborne 10 hours. That would be at least 10,000 bombs plus some conveyor belts and shit, to toss them out of the airplane. So, we're talkin $100 x 10,000 per flight, of revenue. hmmm $1 million.

Well, it's not as profitable as their current federal war business but what the heck. Diversification is good for businesss.

The bombs costs $1 worth of steel, $5 worth of explosives, and a $5 integrated circuit, and a $1 battery and servos to control the tail fins. The service of course would be much cheaper if it was just sold from a website, by credit card with a 1 or 2-day delivery window like UPS or Fedex, with fixed coordinates etc. etc.

I wonder if the non-industrialized countries might become just as safe as Texas has become without gun control. Maybe everybody would behave just like angels, so that their neighbors wouldn't blow them away,


[ Parent ]

future has been here (none / 0) (#99)
by rpisnt7 on Wed Apr 24, 2002 at 01:40:08 PM EST

<html> For extra portability, GSM and its SIM cards could be finally adopted by the US.

GSM has been implemented in various wireless markets for quite a while now, and growing every day. I suppose I would only know this because I rep for the current leading GSM carrier (I'm avoiding stating thier name for risk of being labeled a spammer) and use one of thier phones. Currently you can purchase digital content (ringtones, screensavers, etc.) upon configuring your account then the purchase appears on the following phone bill. The coke machine/tollbooth/everything else (remember Maximum Overdrive?) dialog is on the way and is probably already being implemented in more populated markets.

In regards to who has the financial leverage in this situation, I really don't see too much of a change and the user and holder of the account is the boss. All you really need to do is go back a few years to when ATMs started popping up everywhere, some owned by the financial institutions and others owned by third parties. I would envision options for the wireless shopper would include but not be limited to: 1) a service option for your wireless plan to include banking functions with perhaps a nominal monthly fee, or 2) The leading carrier(s) forming partnerships with national banking institutions or as another poster theorized becoming national banking institutions.


Future Battle: Financial Services vs. Wireless Operators | 102 comments (66 topical, 36 editorial, 0 hidden)
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