Monday 3 September 2007

A Cashless Society

I often wondered how long it would be before there wasn’t any need to carry any physical money, well from today it appears we are well on the way, and even trends backup the move towards a cashless society.

In 2004, card payments over took cash payments for the first time in the UK, while last year £321 billion ($642bn) card purchases were made in comparison to £274bn in cash, with the average Briton putting around £10,000 through card payments. Fraudsters stole around £428 million, which has actually come down slightly thanks to the introduction of Chip and Pin two-factor authentication.

Today the big five UK mobile phone operators switched on “PayForIT”, which allows the payment of transactions up to £10 to be made by mobile phone. I love the idea of not needing to carry any cash, but I am rather sceptical about the use and the potential abuse of mobile phones by criminal elements. To be fair I haven’t had a chance to fully review the “PayForIT” process in great detail, but from what I heard from a spokesman on the radio this morning, it appears convenience has been put ahead of security, which from my point of view always spells trouble.

Personally I think this new payment method will spark an increase in petty mobile phone theft and an increase in mobile phone hacking. I have waffled on about mobile phone security on my blog and Podcast in detail before, so I’ll spare you that today, but with these sorts of payment services becoming common place, the importance of personal mobile phone security becomes even more of a priority. The trouble is the average Joe doesn’t “do” mobile phone security, hence why I think the system will be so open to abuse. And guess what, in a few months time PayForIT can be used for web purchases as well.

It’s worth mentioning Barclaycard have also recently launch their “cashless” payment card, again for all transaction under £10, Barclaycard OnePulse cards requires no signature or pin number, just a simple swipe and you’ve paid, however only a few outlets currently accept the card. I understand the plan is add this “OnePulse” functionality to regular credit cards, which sounds a bit of backward step after the success of chip and pin. Although I tell you what peeves me, is those retailers who insist you spend at least £5 if you use card, or they charge your 50p or a £1 extra. Perhaps the payment card companies should focus more on preventing retailers from having minimum spends and extra costs for low card payments instead of introducing new less secure payment systems, and perhaps they’ll get what they really desire, which namely is all our money directly through their banking systems.

I purchased some Scrumpy Cider from a Cornish Cider distillery just last week, they had a minimum card payment spend of £15, although I have to tell you I had no trouble in exceeding that requirement! *hic*

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