Snippings

I had the good fortune to attend the Australian Payment Summit 2018 in Sydney this year, chairing the panel on Digital Currency and giving the first day closing keynote on the impact of artificial intelligence in the transaction space (I was developing the “where are the customers’ bots” theme). 

Naturally, one of the areas that I wanted to find out about was digital identity. As in many other countries, Australia is trying to deal with a complex mixture of requirements, goals and constraints for some form of digital identity infrastructure and it is far from clear what is going to happen. In the lead up to the event, the CTO of Westpac was quoted saying that “if you are going to move to a more open data-connected world, which we clearly are… you have to solve the problem of digital identity”. Well, yes. I agree 100%.

But how?

There is scepticism about a government solution. The Department of Home Affairs is looking at a single national digital identifier, which I am not sure is the right way forward since identity, as far as I am concerned, should be a menu. A recent report from Australian Strategic Policy Institute (a think tank) cautioned that an attempt to create some sort of digital identity could end up as “a repeat of the failed attempt to roll out the Australia Card” unless the government builds in privacy which, naturally, I agree with. So perhaps it is better to look to the private sector.

With a private sector solution, my preferred first step, of course, is to have regulated financial institutions do it. In Australia,this is indeed what is happening. Their approach is to have the Australian Payment Network (AusPayNet) tackle the problem under the auspices of the Australian Payments Council and they have been doing an interesting experiment in “agile” development to begin to explore what might be practical in the mass market, but it is still not clear how the banks will work together to deliver a mass-market solution that will be the platform that a modern economy needs. And, it turns out, I am not the only one.

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In his keynote speech at the Summit the Governor of the Reserve Bank of Australia (RBA), Philip Lowe, said that digital identity is likely to become increasingly important as more and more activity takes place online and went on to say that the RBA is “highly supportive” of industry collaboration on this issue and views it as important that substantive progress is made. During the Q&A session he said (I paraphrase) “we all agree that something must done, but we can’t agree on what is it” and that the “institutions will need to compromise in the national interest”. I think these are very interesting (and very insightful) remarks.

This led me to 

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new payment applications that provide a commercial return, not through charging for payment services, but by commercialising the value of the information that they obtain as a by-product of offering these services.

From A Journey Towards a Near Cashless Payments System | Speeches | RBA.

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Security researchers have found a vulnerability in the backbone of the electronic ID (eID) cards system used by the German state. The vulnerability, when exploited, allows an attacker to trick an online website and spoof the identity of another German citizen when using the eID authentication option.

From German eID card system vulnerable to online identity spoofing | ZDNet.

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neuroscience is a far greater threat to human distinctiveness than AI will ever be

From Is Neuroscience a Bigger Threat than Artificial Intelligence? – 3:AM Magazine.

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The government plans to give a 5 percent reward-point rebate to consumers on some payments made through credit cards and other cashless methods as a way of underpinning domestic demand after a planned tax increase next October,

From Government plans 5% rebates for some cashless payments after 2019 tax hike | The Japan Times.

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There are two proposals by the Swedish authorities to keep cash at hand. Parliament wants just the biggest banks to handle cash. The central bank is holding out for all banks to keep money flowing. Swedbank, SEB and other big Swedish financial institutions are fighting the lawmakers’ demands, saying it would place an undue burden on them to provide greater access.

From Sweden’s Push to Get Rid of Cash Has Some Saying, ‘Not So Fast’ – The New York Times.

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There’s an interesting case study about this at IKEA in Gavle, which is about 100 miles north of Stockholm. According to the New York Times, managers there decided to go cashless temporarily last month after they realized that fewer than 1 percent of shoppers used cash. The economics of this decision are compelling. They found that employees were spending about 15 percent of their time handling, counting and storing money.

The usage statistics make for interesting reading. It turns out that to date only around 1 in every 1,000 customers wanted to pay with cash and that was mainly for low value transactions in the cafeteria (do they still call them “Swedish meatballs” over there?). For those few, IKEA has been giving them the food for free rather than mess around trying to bill them.

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“Washington restaurateur Bo Blair, whose company Georgetown Events operates eight fast-casual and three sit-down restaurants in the District, decided to experiment going cashless when opening Surfside in Dupont Circle in 2015.

Usually, cost-conscious small businesses operate cash-only to avoid card processing fees.

But cash also has hidden costs, Blair said: Armored vehicles taking money to banks. An extra hour for workers to close out the register. Employees swiping money from the till. And some of his places had been robbed.”

From “Do cashless restaurants discriminate against the poor? D.C. lawmakers think so. – The Washington Post”.

 

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Yes, that’s right. Cash is so much hassle that it’s cheaper to give out free meals rather than handle the stuff.

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An aspiring Tory MP posed as the ‘youngest hereditary lord’ to slip into Parliament using a counterfeit security pass he bought online for £10.

From Aspiring Tory MP used fake pass he bought online to pose as ‘Lord Cramp’ and sneak into Parliament | Daily Mail Online.

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But he was reported to security by a political assistant who recognised him from previous Conservative Party events.

From Aspiring Tory MP used fake pass he bought online to pose as ‘Lord Cramp’ and sneak into Parliament | Daily Mail Online.

 

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Peer-to-peer business lending retained the top spot, with £2 billion in transaction volume in 2017 and 65% year-on-year growth, estimated to be equivalent of 29.2% of all new bank loans to small businesses in 2017. That’s nearly double the 15.3% figure in 2016.

From Alternative finance platforms report stellar growth.

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“If you are going to move to a more open data-connected world, which we clearly are – open banking being the start, but we’re going to see it across, and technology’s going to create that – you have to solve the problem of digital identity,”

From Westpac’s Dave Curran warns of “trust gap” hovering over digital identity, open banking – Finance – Strategy – Cloud – iTnews.

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