Snippings

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Paul Volcker, of the U.S. Federal Reserve fame, even considered it [the ATM] the “only useful innovation in banking.”

From A Brief History of the ATM – The Atlantic

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“I don’t mess with Venmo because I don’t trust it,” he said.

That view echoed what someone said on this panel last year when it was comprised of young college students. Trust can be an important factor when choosing which products consumers use day to day.

From Is Zelle finding a groove with bank customers over Venmo? | Mobile Payments Today

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Although it will be a while until we get the 2017 figures, the 2016 figures were unequivocal. Card fraud is worse than ever, and in the UK it’s now worse than when chip and PIN was introduced.

Card fraud losses for 19 European countries hit approximately €1.8 billion, a new high. The UK saw the highest losses at £618 million, a 9 percent rise over 2015, topping the previous peak in card fraud, set in 2008 after the introduction of chip and PIN.

From European Card Fraud for 19 Countries Hit Record €1.8B in 2016 | FICO®

We’re fighting with the French for top spot in the European Champions League of Card Fraud. Who’s in front depends on how you measure things. Our fraud is  high, largely because of our very high Card Not Present (CNP) fraud which is running at more than 12 basis points. So we have higher absolute losses but their overall loss is worse in proportion. Of course, it isn’t just a European problem.

Fraud, grew by 19%, and outpaced volume, which grew by 15%.

From Annual Global Card Fraud to More Than Double Reaching Over $35 Billion in Four Years

My general sense of the industry, without giving away anyone’s figures, is that not only is fraud growing faster than volume, but that merchants are getting annoyed because declines are growing even faster than fraud. (We need a sea change in tackling fraud and I think there are two parts to this: changing the security vs. convenience model at the front end and changing the transaction validations model at the back end.) Actually, merchants are annoyed not only because of declines.

As e-commerce merchants continue to invest in fraud prevention, those efforts cost, on average, 8 percent of their annual revenue, up from 7.6 percent last year, according to a new report… undertaken by Javelin Strategy & Research

From Fraud Prevention Costs Merchants 8% of Annual Revenue: Report – CardNotPresent.com

It’s actually nearer 10% for online-only merchants. This seems unsustainable to me, but remember I don’t understand the dynamics in the retail sector. If a lot of those online-only merchants are (just as an example) adult services then they may consider that losing a tenth of the revenue is perfectly acceptable. But surely for the typical online merchant it is impossible to continue with these costs. You do have to wonder just how long the cost of fraud can continue to rise, considering that the report also says the merchants are already devoting a fifth of their budgets to fraud prevention.

The card schemes are hoping to see their solution (3D Secure v2) taken up by European merchants in the spring and I’m sure that this will help. But what we really need to do is to roll out what we already know to be a successful roadmap: tokenisation, biometric authentication and a useable customer interface. When I buy a bus ticket on my phone, I pay using Apple Pay which delivers all of these: the W3C “payment request” initiative (already being implemented in the main web browsers) provides a means to extend this solution to the web. Let’s get on with this in the UK and leave the fraud trophy to the French!

There’s a fascinating article int he archives of The New York Times. It’s from July 1992, and it’s all about the future for “personal wireless communicators” or what we now call “smartphones”. While John Sculley, then head of Apple, is enthusiastic about the coming “mother of all markets”, the idea is poo-pooed by Andrew Grove, the chairman of Intel, who called the idea of a such devices in every pocket “a pipe dream driven by greed”. Now, while it’s always fun to go back and find important, clever people making predictions that turned out to completely wrong, what’s more interesting to students of paleo-futurology is why they were wrong and what we can learn from that so our own strategies can me made more robust. I found the issue of software raised in the article particularly interesting in that context.

Personal communicators for the mass market raise the possibility of dozens, hundreds, even thousands of different designs and functions and operating standards, each tailored to a different need.

From The Executive Computer – ‘Mother of All Markets’ or a ‘Pipe Dream Driven by Greed’? – NYTimes.com

We’ve ended up with, basically, Apple and Google. A quarter of a century after that article was written, one generation after that predication of chaos, we now find that almost all (in fact 99.6% at the start of 2017) smartphones run iOS or Android.

Other countries have a more robust approach to banking regulation and less sympathy for poor behaviour by bank management.

The former head of a major Vietnamese bank has been sentenced to death for his role in a fraud case involving millions of dollars of illegal loans.

From Vietnam fraud trial: Death penalty for ex-head of OceanBank – BBC News

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Contemporary artists are increasingly turning to vellum – the prepared animal skin sometimes known as parchment on which Britain’s Acts of Parliament have traditionally been printed – to insure against the risk of copies of their work being passed off as originals.

But while the use of vellum goes back to the classical age, its use to foil bogus copies of valuable paintings is the result of a very modern technique – DNA analysis.

Because, as an animal product, each piece of vellum used to paint on carries its own unique DNA fingerprint.

From Artists turn to vellum to beat the forgers copying their work

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Take, for example, Roomba, the adorable robotic vacuum cleaner. Since 2015, the high-end models have created maps of its users’ homes, to more efficiently navigate through them while cleaning. But as Reuters and Gizmodo reported recently, Roomba’s manufacturer, iRobot, may plan to share those maps of the layouts of people’s private homes with its commercial partners.

From The ‘internet of things’ is sending us back to the Middle Ages

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when it comes to the big three areas covered in the research – payments, securities settlement, and central bank-issued digital currency – the Bundesbank experts are wary.

The authors “see little prospect of DLT being put to widespread use in the field of individual and retail payments given the current state of the art”.

From German central bank flags DLT weaknesses

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There are technical factors that explain why cybersecurity is so weak, but the underlying reason is political, and it’s pretty simple: Big corporations have poured large amounts of money into our political system, helping to create a regulatory environment in which consumers shoulder more and more of the risk, and companies less and less.

From Equifax’s Maddening Unaccountability – The New York Times

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blockchains are not super-computers or AI machines – neither Freenet nor Skynet – they’re databases

From Monax | Blog | Smart securitisation, or: why it’s time to stop talking tokens and start talking smart contracts

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