I read recently that if you are attending this year’s Wireless Festival in London you will be able to pay for food, drinks and merchandise with just a swipe of your wristband! Amazing! This is thanks to the same technology that powers contactless debit cards and mobile phones.
Barclaycard are sponsoring the event and they will be issuing the PayBand, which can be loaded with money from your bank account at various points around the festival and it is hoped that this will be quicker and more secure than festival goers withdrawing cash from an ATM and carrying it with them.
The wristbands can be loaded with up to £250 and each payment will be limited to £20 per transaction. No PIN is required meaning making a payment will be quicker than the chip and PIN system.
Whilst this sounds very advanced and cutting edge and will undoubtedly be super-fast and efficient it did make me ask the question regarding the security of such a device? Personally speaking I am quite traditional and security conscious when it comes to my banking, it took me a long time to trust chip and pin! I’m not sure I would be happy to pay for my drinks by swiping my wristband.
Is having the technology to use our mobile phones and other devices to make payments or transfer money, without using a pin code, compromising our security? Would you feel comfortable paying for something in this way? Have you already used Barclays ‘Ping it’ for example?
I’m really interested to get your feedback on this.
Helen Storey is the Managing Consultant for BrightPool.
Hi Helen,
Back in the mid 90′s I worked with Mondex, a smartcard based e-cash product. It was, and may still be for all I know, the only genuine two party e-cash solution. The design goal was that it should offer exactly the same consumer proposition as good old cash. So, it also meant that if you lost your smartcard then it was the same as dropping cash in the street. The chances of getting it back were slim!
That said, it also functioned like a real purse, and it was indeed called an “e-purse” or “the purse”. The equivalent of the lock or clasp was a PIN which required a device such as an ATM or the small authentication devices that the banks dish out these days to lock and unlock. However all of the consumer experience surveys showed that no one bothered with this as it was too much hassle. Instead, the purse limits were used by the consumer to limit the amount that might be lost and the e-purse would never contain more so you always knew your maximum loss. Just like cash in your real purse or pocket!
We also spent a long time anguishing about micropayments on the web and the security of the same and developed some elegant solutions to that problem using cryptographic techniques. Again, we had the design goal of two-party transfers.
But the market moved on and, despite all of the concern about online credit card payments, the consumer again demonstrated that they were less risk-averse (some would say risk-aware) than we gave them credit for (no pun intended). Hence PayPal and all the three party systems we now have which were simpler to implement.
To see the mature model for e-cash it is best to travel to Japan. The apps all live on mobile phones and that is how everyone pays for mass-transit and small purchases now. I am absolutely sure this is where we are also headed in due course. An Oyster app on the mobile then also used to pay for your coffee and paper at your destination. Loyalty points are just a logical extension of all that.
So, if I lose my phone it is exactly like losing my wallet with all my cash, Oyster and scruffy loyalty cards. I probably care more about the phone actually as I can easily shrug my shoulders about the cash and loyalty and the Oyster is easily stopped after all. Credit is different of course and that is why chip and Pin will be with us for a long time yet!
Great topic Helen, thanks for posting.
Charles