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Cashless Society 661

Posted by michael from the your-cashcard-or-your-life dept.
roomisigloomis writes "France has released "en masse" a new card to replace money. No private information is stored on the card and anybody can use it. Just like cash: you lose it and someone else uses it. Do you think we could be nearing the end of life of paper money?"
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Cashless Society

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  • Old news (Score:5, Interesting)

    by reynaert ( 264437 ) on Sunday February 09, 2003 @02:34AM (#5262863)
    In Belgium this has been available for a couple of years now. It's called Proton over here and is pretty popular.

    • Re:Old news (Score:4, Informative)

      by bert ( 4321 ) on Sunday February 09, 2003 @03:29AM (#5263065) Homepage
      Same in Holland...

    • Why so many different standards? (Score:5, Informative)

      by Kinniken ( 624803 ) on Sunday February 09, 2003 @04:04AM (#5263179) Homepage
      As a french pro-european, I'll amazed at the short-sightedness of the various european govs in supporting those cards.
      As pointed out in numerous posts, cards like this exist all over Europe... and yet, AFAIK, none are compatible.
      Think about it: with the Euro, I can go in any of the 12 participating countries and pay with the same money, without any problem. With this great cool new gadget, I'm limited to a few shops in my own country. Oh, and I kinda like the euro coins, it's fun to see some from 12 different countries mixing in my pocket. This thing is just a bit of plastic. And it's expensive too.
      Needless to say, I'm not getting one before I can use it all over the EU. And before it gets cheaper, as well.

      • Re:Why so many different standards? (Score:3, Insightful)

        by Anonymous Coward
        Amen to that! I live in the Netherlands, and we have not one but two similar (and afaik incompatible) systems: Chipper and Chipknip.

        Now the banks are desperately trying to make their cards more popular by *requiring* them for certain transactions. For example, in some cities they have made deals so you can only pay for parking using one of those cards.

        I received mine years ago, and I have *never* used it for anything (I haven't even put any money on it). I find normal money is just as (in)convenient, and I do not see any good reason why I should switch to this fake money.

  • Card to card transfers? (Score:4, Insightful)

    by basilisk128 ( 577687 ) on Sunday February 09, 2003 @02:34AM (#5262866) Homepage Journal
    I wonder if there will be a way to transfer money directly from one card to another, although I suppose you would need a separate machine for that.

    Otherwise you could only use it at places like stores, where they would have a card reader.
    • When the same company ran the idea here in the UK you could transfer card to card. The reason it died here was that they charged too much for it.
    • "I wonder if there will be a way to transfer money directly from one card to another, although I suppose you would need a separate machine for that."

      I suspect there will be a way to do this, but I have a feeling they won't make it easy for us to do so. The leftover change remaining on those prepaid cards is very tempting to the issuing organizations. In France, you already can't get a refund for the leftover change you have in your phone cards.

      As consumers, it is important that we don't utilize this mode of paiment until we get this refund/rollover issue guaranteed and clarified.

    • Re:Card to card transfers? (Score:4, Insightful)

      by MikeFM ( 12491 ) on Sunday February 09, 2003 @05:40AM (#5263421) Homepage Journal
      I think that is the main problem with smartcard based digital cash. If you can't transfer between average Joe's without special equipment it's just a fancy debit card. Add a small screen and keyboard (think credit card sized calculator) and make it so they can transfer data by touching and you'd have a decent form of digital cash. If you are retaining the information in a central db somewhere you'd have to have the sending card digitally sign and timestamp the transaction and the recievers card check that data for correctness.. then next time the cards were used somewhere with a connection to the central db it'd send a copy of that transaction in to update the db. The unique signed tranasaction data would make it hard to fake the transactions.

  • How do I count it? (Score:5, Insightful)

    by jonjohnson ( 568941 ) on Sunday February 09, 2003 @02:35AM (#5262868) Homepage
    Paper money has the advantage over the card because you can see how much you have without accessing that information somewhere else.

  • and now, how to NOT hack it (Score:4, Insightful)

    by eille-la ( 600064 ) on Sunday February 09, 2003 @02:35AM (#5262869)
    the subject.

  • How am I suppose to put this... (Score:5, Funny)

    by Chris_Stankowitz ( 612232 ) on Sunday February 09, 2003 @02:37AM (#5262874)
    down some strippers G-String? How I ask you?

    • Re:How am I suppose to put this... (Score:5, Insightful)

      by bm_luethke ( 253362 ) <`luethkeb' `at' `comcast.net'> on Sunday February 09, 2003 @02:49AM (#5262941)
      This is actually a good point. One of the advantages of cash is that it can be split into whatever demoniations you have.

      For instance, if I have a 45 dollar card and I want you to have 5 dollars, can't do it without a transfer machine (or if you forgot your card). With cash easy, assuming I have a five.

      And then counterfitting. Wow, if money is only a string of ones and zeros on a card WOO HOOO. So its digitally signed? great I just bought a 100 dollar card and did a bit by bit copy.

      Use a central authority, better hope that thing never gets hacked. Use a distributed method - gonna have SEVERE syncing problems (if it is anonymous then you can't just bill me later for the over charge).

      As of right now there is not enough incetive for many to hack a system, make it so it is and you will have script kiddies cloning money - yech.
      • And then counterfitting. Wow, if money is only a string of ones and zeros on a card WOO HOOO. So its digitally signed? great I just bought a 100 dollar card and did a bit by bit copy.

        No problem... You still have only $100. Make a thousand copies, still just $100. See, the problem is that each card has a serial number. Use up the balance once, & all the copies also have a zero balance. Granted, I'm speculating on the actual mechanism, but it's fairly trivial to prevent simple copies. More advanced hacks are possible, but I wouldn't worry to much about simple things like this.
    • ...you could try swiping it in the slot?

    • You buy cash vouchers... (Score:3, Interesting)

      by hughk ( 248126 )
      I know this is funny but here is what actually happens at a particular club in Europe, Golden Dolls in Frankfurt.. You buy "Golden Dollars" (Note: not euros) with your Credit or Debit card, you insert said "Dollar" into lady's whatever. Lady exchanges said "dollars" back for real money at a house discount. Cash tipping isn't permitted.

    • Re:How am I suppose to put this... (Score:5, Funny)

      by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Sunday February 09, 2003 @03:08PM (#5265987) Homepage Journal
      Just run it down the slot.

  • Fatal Flaws (Score:4, Interesting)

    by NeoMoose ( 626691 ) <neomoose@@@despammed...com> on Sunday February 09, 2003 @02:37AM (#5262875) Homepage Journal
    What the hell are you supposed to do when someone decides to be an ass and demagnetize your card? Does your money just vanish since you can't scan it and it carries no identifying information?
    • From the first sentence of the article:
      "The chief idea behind this new breed of microchip-embedded plastic is simple -- to dispense with pocket change and speed smaller transactions."
      Sounds like a "smart" card to me.
      Any more questions?

    • Re:Fatal Flaws (Score:3, Interesting)

      by TeknoHog ( 164938 )
      It's a flash chip, not a magnetic stripe. Still, there's the potential problem of hacking into it, for example to add more money.

    • Re:Fatal Flaws (Score:5, Insightful)

      by trmj ( 579410 ) on Sunday February 09, 2003 @02:49AM (#5262942) Journal
      Just as with a credit card or current cash cards that (most) stores use, there would probably be a section of raised lettering that would carry the card's ID number. In fact, if you look at the picture [cnn.net] closely, you can even see the numbering.

      The main roblem the I see with this is how does business get done then the system is down / power is out? You wouldn't be able to access the DB that store all of the card information, and therefore wouldn't have any way of verifying if there is money on the card that somebody is using or not.

    • Re:Fatal Flaws (Score:5, Insightful)

      by Chester K ( 145560 ) on Sunday February 09, 2003 @03:52AM (#5263145) Homepage
      What the hell are you supposed to do when someone decides to be an ass and demagnetize your card? Does your money just vanish since you can't scan it and it carries no identifying information?

      How's that any worse than when someone decides to be an ass and burn your cash? I'd hardly call it a "fatal flaw" since it's no worse than the alternative in that respect.

      Would you rather have a system where they can track your purchases, but provides security for your money, or one that protects your anonymity but doesn't guarantee your money? You can't really have it both ways.

      • Re:Fatal Flaws (Score:4, Insightful)

        by Kallahar ( 227430 ) <kallahar@quickwired.com> on Sunday February 09, 2003 @12:53PM (#5265110) Homepage
        Except that you can be de-magnetized by someone simply getting near you. At least they have to actually pick your pocket in order to burn your cash.

        Perhaps they could have the tracking optional? Say, you have the option to put your tracking-code on the card so that the balance is kept on the servers. That way if you're worried about losing it you could voluntarily give up your privacy, but if you want it anonymous then you could, but not have any recourse if it gets erased.

        Travis

    • Fatal Flaws - Not quite. (Score:5, Informative)

      by Fruny ( 194844 ) on Sunday February 09, 2003 @04:18AM (#5263222)
      Since smart cards in France all incorporate a chip, their magnetic strips are rarely used. Thus, even if the strip id demagnetised, so long as the chip is OK, the card is OK too.

      And hopefully, it takes more work to mess a chip up than a magnetic strip.

  • If it were free... (Score:5, Insightful)

    by redtail1 ( 603986 ) on Sunday February 09, 2003 @02:37AM (#5262879)
    Not a bad idea, but this sounds like a sleazy way for financial institutions to get a small piece of every transaction they currently can't touch, namely cash transactions.

    • Re:If it were free... (Score:4, Informative)

      by tincho_uy ( 566438 ) on Sunday February 09, 2003 @06:02AM (#5263460)

      It's neithert new nor free, actually... Banks do take a cut on every transaction you make. I live in Brittany, and in our region it's been available for about a year now, and it's not being very succesful.
      The idea is to use it for small buys, (normally, under around 50eu) for which Debit Card (Carte Bleue) transactions are deemed too expensive (most shops won't take your CB for less than 15eu). At any rate, I know of some businesses that have dropped Moneo, because the banks' commisions are still too high for small ammounts

  • I'm not sure.. (Score:5, Insightful)

    by Gyan ( 6853 ) on Sunday February 09, 2003 @02:38AM (#5262881)

    Paper money has to be carefully studied and then duplicated with painstaking attention to detail.

    Someone could just probably figure out how money is "stored" and just keep on replenishing. Note the card is anonymous.

    Money might not grow on trees, but it can be created by computer :-)
    • Someone could just probably figure out how money is "stored" and just keep on replenishing. Note the card is anonymous.

      There might be a feature making the card not 100% anonymous, but such that it will be anonymous only if you do not reuse the same money again. Of course that introduces another problem if you loose the card.

    • Re:I'm not sure.. (Score:5, Informative)

      by IvyMike ( 178408 ) on Sunday February 09, 2003 @04:25AM (#5263243)

      Someone could just probably figure out how money is "stored" and just keep on replenishing. Note the card is anonymous.

      David Chaum's digicash [vipul.net] system was a good solution to this problem. He developed a system of completely anonymous (even to the bank) e-cash. The executive summary is: using techniques common in encryption, the cash is unforgeable and can be spent once. If you spend the cash twice, there's a random challenge-response sequence you have to go through each time, and you will have now revealed enough information that you're no longer anonymous, and the fact that the money is being double-billed is detected and prevented.

      Googling for "Chaum" and "digicash" gets you a lot of articles which explain the system (which is quite complex) in a level of detail beyond that which is appropriate for slashdot. :) It's a bit hard to believe (at least without going through the math yourself) that it's both anonymous and unforgeable, but that's the beauty of it. There are also quite a few articles about Chaum's company "Digicash" which appears to have been poorly managed. That doesn't change the fact that the mathematics behind digicash are sound.

    • Nope (Score:3, Interesting)

      by istartedi ( 132515 )

      The money is anonymous, but it's numbered.

      A legitimate "add cash" operation leaves a record in the database.

      When the user tries to pass the counterfeit card, the database is checked and when it finds, for example, that "card 0x8782a321=54.21" but the card says "card=100.00" the POS terminal knows it's counterfeit. The integrated security camera clicks on, homes in on your face, and e-mails your picture to the authorities.

      I like that. We in theory could do this now with old-fashioned bills. One camera (with a *very good* machine vision system) looks over the shoulder of the cashier. Camera one is looking at the serial numbers of the bills. Camera two is looking at the customer.

      Camera one is hooked into a database that tracks the locations of bills and serial numbers (think WheresGeorge on steroids). If the system discovers a bill passed with SN that isn't in the database, or that is already in a till someplace else, the customer becomes a counterfeiting suspect. This obviously requires some sophistication. For example, a bill may not be in the till anymore, but if it left the till in Hawii, and enterred a till in Maine 45 minutes later, you know the bill in Maine is counterfeit. The program would obviously have to be updated if commercial hypersonic transports ever became available (!).

      Such a system won't catch a counterfeiter every time, but the odds would catch up with him. A more cumbersome system that doesn't use machine vision and requires the cashier to run bills through a scanner could probably be implemented in a much shorter time. Building RFID tags into the money makes even better sense if they are robust enough, but ongoing passage of "microwaved" money would make you a counterfeiting suspect even if your money was being legitimately zapped..

      I like this. It is, in some ways, the antithesis of "the beast" because they are numbering the money as opposed to numbering the people.

  • When I first moved to the Netherlands in 1999, I encountered a system very similar to this called KnipChip (or something like that). It was included on all debit cards, but, just as is stated in this article, it's completely anonymous. There's no PIN, no waiting, just instant payment. Good stuff.

    I wish that it would take off in more places so that I don't have to sit behind the five idiots who decide to pay for their milk with debit/credit cards at the supermarke.t

  • security concerns? (Score:4, Insightful)

    by r0b0t b0y ( 565885 ) on Sunday February 09, 2003 @02:40AM (#5262891)
    i wish the article looked into how the gov't insured that evildoers are not able to illegally hack cards to increase their value (or start counterfeiting cards) ..

    the article did mention card refills, so it would seem the chip on the card is (re)writable.
    • In the New York City transit system, the cards just store a unique ID, not the cash or ride value of the card. Thus if they get counterfeited or duplicated ( which is fairly simple from what I understand since they just use a mag stripe ) no new value is created. They were planing to let people use the cards for small purchases at one time but it never happened. That's why the system is pretty secure even though the cards themselves are not. It also as a byproduct creates a track of everywhere you have used your fare card.

  • Doesn't work... (Score:5, Informative)

    by fulgan ( 116418 ) on Sunday February 09, 2003 @02:43AM (#5262903)
    This CashCard has existed here in switzerland for several years. It is, however, largely ignored except for a few places.

    The reason for that is simple and the same as why, in France, the new card is not being well accepted: It has an expensive transaction cost compared to the price of the item you purshase (think 10 centims per transaction where you would use it to buy 1 Euro items), the fact that it is far from annonymous and finally the fact that the machine you use to "load" the card is compley and damn slow to manipulate (whant to buy ? Load your credit card, punch your PIN, wait until the bank answer, withdraw your card, load your cashcard, deposit, remove cash card, load it again, buy item - about 5 minutes for the average persone).

    The only place here, in Geneva, where it is commonly used is for public phones and for paying for car park. Several articales of the French TV and the words from my French friends shows that the same apply to France.
    • The only place here, in Geneva, where it is commonly used is for public phones and for paying for car park. Several articales of the French TV and the words from my French friends shows that the same apply to France.

      I could say the same thing about Singapore as well. Out here in Singapore, we have a plethora of cards; phone-cards, photocopying-cards (for the library), national ID cards (for everyone, including non-citizens who are not on a social visit pass), smart contactless cards for the public transportation system (you tap the card when you enter and leave). In addition, I also have my ATM card, debit card, university ID, airlines frequent flier ID, my re-entry visa (yes, no passport endorsement) and a few calling cards. Obviously, it is extremely covinient to save" cash onto my university ID and use it instead of cash; don't have to lug around the photo-copying cards or all those phone cards.

      The problem, really, for me is not if the government can track my spending habits. I'm more concerned about *losing* the CashCard-cum-university ID; if I ever do, I can't enter labs, toilets, research centers, dorm rooms in addition to losing whatever money is saved on the card. A small card, methinks, is easier to lose than a huge wallet. Which is why I tend to use the CashCard in addition to normal cash and all the other cards.

  • So how, exactly, is money transferred personally? Are there booths/kiosks available to take $$$ from one guy's card an put it on another? Does one need to do this through a website?

    I'm guessing that until the above can be complete solved and adopted, this won't be replacing the paper stuff.

  • "Moneo can be incorporated onto their existing credit cards -- something that has never been tried outside of France."

    We've had these 'cash chips' on credit cards, along with standalone cards, for years in Finland. The only problem is that the system is not used widely enough, so you still need real cash.

    Based on this experience, I don't think this French equivalent will succeed much better. Not everyone who handles money can afford the necessary equipment (think about lending money to your friends, etc.)

  • I don't know about you, but I don't believe this stores no personal information. That's just too good an opportunity for those in 'control' to pass up. Once the electronic infrastructure is in place it is only seconds work to add extra information.

    Once that's in place there's no stopping it.

  • Sounds good to me (Score:2, Interesting)

    by virtig01 ( 414328 )
    This would, in theory, save the Treasury Department a significant amount of money. The Sacagewea (sp) dollar coin was introduced to reduce Americans' dependence on the paper dollar, since a paper dollar must be replaced more often then minted money. I mean, I've got a 1963 nickel in my pocket right now. What's the oldest dollar in your wallet?

    Of course, I'm not so certain that this needs to be a government implemented project. Companies in the private sector have already done something similar, see Visa [visa.com].

    And anyway, don't many people choose to be cashless as it is now? When I was in retail, a large percentage of people paid with debit cards linked to a major credit card. There's no cash! John Doe has his paycheck directly deposited in to his checking account, then pays for purchases with his debit card which utilizes a preexisting network system (Visa, Mastercard).

    So bottom line: yeah, a (near-)cashless society is cool, but is government intervention necessary?

    • What's the oldest dollar in your wallet?

      Not having dollar notes here (australia) any more, I can't say - but it's still very common to come across the older style first-issue polymer $5 notes. They're running on to over 10 years old now. Occasionally the first-issue $10 polymer notes pop up, but as they were a first-off trial and a bit rarer, it's not so common. They date from 1988.

  • Now spam will say

    "make cashless with your home pc!!"

  • Low risk of fraud (Score:2, Insightful)

    by mericet ( 550554 )
    At a 100 Euro limit, even the lamest implementation, if moderatly resistant to hacking and with better resistance to a constant charge hack is better than paper money which can be printed en-masse.

  • From the article:

    ...the cash that's stored onboard can be used by whoever finds it -- which is why there's a $107 storage limit.

    If anyone else is wondering about this odd dollar figure as the card's maximum limit, $107USD = approx. 100 Euros.

  • Ah, cash cards (Score:2, Funny)

    by chiguy ( 522222 )

    Vending machine: c300

    Smart card reader: c200

    Smart card burner: c500

    Giant magnet: c20

    The look on your friends' faces when they see your new house, car, and girlfriend bought with your uber cash card: PRICELESS!

  • What about ad-hoc cash transfers? (Score:5, Insightful)

    by Anonymous Coward on Sunday February 09, 2003 @03:09AM (#5263006)

    I don't see how this is addressed.

    (1) What if the babysitter comes to my house and I owe $4.50. Do we both go to the nearest ATM to transfer onto our cards? Will I have a card swipe in my house (most probably not).

    (2) The joke about lap dances someone made before my post actually rings true. How does one pay for these kinds of impromptu needs? How do I loan a friend $1 to get a bottle of pop? Do I give them my card to borrow? Would I give them my wallet? Maybe lap dancers will have card swipes strapped on ... somewhere ... for easy payment.

    (3) What about counting your cash? Simply, how do you know how much is on your card without going to an ATM to get a readout?

    (4) How do you give the kids a few dollars to shop or grab a bite? How do you give them one dollar to grab candy before the movie starts? Do you give them the entire card? Again, do you give your entire wallet / purse for a need like this?

    (5) If a card gets snapped in half, then what? When a paper bill is ripped, a taped one is still legal tender. What about cards?

    (6) Can someone run a bulk demagnetizer over my card and financially wipe me out? This is a serious concern, folks.

    How are these simple needs addressed? I also like to think that the days of paper money are numbered -- but how are these needs met?

    Maybe withdrawing all paper cash $5 and over, converting US dollar bills to a system like Canadian $1 and $2 coins for small change needs? Coins are much more convenient than paper that gets folded, spindled, mutilated, torn, etc.

  • Paper cash is reliable. it doesn't disappear in a magnetic field, won't be rendered useless under mild abuse (such as bending, scratching), and will still be accepted by more than a few places taped back together. And who knows...? I might actually want to carry over $107 dollars at a time...!
  • In Denmark, the purse card Danmønt [danmoent.dk] has been around since 1991 but has never really taken off since you can use it at few places only. The nationwide credit card, Dankort [dankort.dk], however, is immensely popular.
  • Ok, let's think about how such a thing could be implemented...

    If the card's worth were encoded on the magnetic strip itself, it would be a matter of days before someone figures out how to hack the thing and add as much cash as they want to it.

    If, on the other hand, the card's worth were stored in some central location, the thing is not anonymous at all. There would be a centralied account somewhere (which necessitates some form of ID number by which people may be tracked), and there's no way guarantee that someone's not keeping track of transactions to and from that account.

    I would argue that such a card can be no more anonymous that a standard debit card, which most of us carry today.

  • Who gets the float...as if I need to ask (Score:3, Interesting)

    by hazman ( 642790 ) on Sunday February 09, 2003 @03:33AM (#5263074)
    The problem I see with these cards is that you essentially buy them from a bank.

    Let's say you buy a $100 dollar card from the bank. The bank transfers $100 from YOUR account to their account from which it can be used by the bank to loan to other customers and earn interest (mortgage loans, auto loans, credit card loans, etc). So if it takes 2 months for you to use up the $100, you've "given" your capital to the bank to use for two months.

    On top of the banks getting the "earning power" of your $100, they charge you to get your capital back through transaction fees! So at a minimum, the bank makes 50 cents on every card it "fills up". If it takes you two months to use the card, they get up to ~$2.00 more!

    On top of all that, what happens to the money that never gets used, lost cards, broken cards, cards that have only 50 cents left on them so they get tossed into glove box. I'm sure the banks won't let go of that "unclaimed" cash without a fight.

    No, I'll continue to use my ATM card that's linked to an interest bearing checking account, even though its a microscopic rate and live under the illussion that I have control of my cash.

    • Re:Who gets the float...as if I need to ask (Score:5, Informative)

      by Drakonian ( 518722 ) on Sunday February 09, 2003 @05:23AM (#5263377) Homepage
      The bank transfers $100 from YOUR account to their account from which it can be used by the bank to loan to other customers and earn interest (mortgage loans, auto loans, credit card loans, etc). So if it takes 2 months for you to use up the $100, you've "given" your capital to the bank to use for two months.

      Huh? Do you think that currently when you have x dollars in YOUR bank account, the bank does not touch that money and keeps it safely secured for you? Or do they loan it out to other customers and earn interest? Of course the latter - that's how banks work!

  • I don't need to tell slashdot that smartcard money is vulnerable. Since you can transfer money between cards without the interaction of any other party, all you need to do is:
    1. Find the secrets on a card (possibly by detailed examination of the card in your hand or by social engineering/theft)
    2. Build something that simulates a smartcard (it can be as ugly as you like, no-one will see it)
    3. Transfer money from your simulated card onto a real card
    4. ???
    5. Profit...
    That's kinda hard work. But if your object is to defend against a smartcard system, there is an easier way to destroy public trust in it:
    1. Charge a real card with real money.
    2. Remove the chip from the card.
    3. Embed the genuine charged chip in a blank, white plastic card.
    4. Go on TV and claim "Here's one I made earlier" and get them to test it.
    Andrew
  • One drawback with this is that at least with cash you can almost guarantee anonymity (modulo fingerprints and DNA, maybe). Can you verify the anonymity of transactions using these cards?

    And, of course, there's the worry that reverse engineering the card codes and card readers to verify anonymity. I suppose you might get busted for doing that.

  • CNN's cluelessness (Score:5, Insightful)

    by xigxag ( 167441 ) on Sunday February 09, 2003 @03:57AM (#5263160)
    From the article:

    Because the basic Moneo card is anonymous, there are no privacy or identity theft concerns.

    Regardless of whether the "basic" card is anonymous, it's still clearly possible to track the card's use, and by extension, its user, who has to be identified to obtain the money to begin with.

    Step 1) $100 were downloaded from John Smith's bank account to card #12345

    Step 2) Card #12345 was just used to purchase $80 worth of pr0n.

    Step 3) Bank sends John Smith a bunch of porn-related junk mail.

    The retailer might not be able to ascertain John Smith's identity, but the bank most likely could, if it were part of the network.

    And the government certainly could. Not familiar with France, but in US translate "could" as "would."

    I hope someone can contradict me here. In particular, I'm wondering if there's a way to anonymize Step 1, such that: 1a) $100 is transferred from John Smith's account to a special secure escrow network which is holding money from many pending transfers. 1b) ATM 385 is given authorization to loads up a card with $100. 1c) ATM 385 loads #12345 with $100 drawn from the escrow network. 1d) After transaction is complete, all bank knows is that $100 is gone from John Smith's account and given to ATM 385. All ATM 385 remembers is that it loaded $100 onto card #12345. It doesn't remember the account it was originally taken from. Does this make sense?

    • Re:CNN's cluelessness/MY cluelessness... (Score:5, Informative)

      by xigxag ( 167441 ) on Sunday February 09, 2003 @12:38PM (#5265027)
      I'm the writer of the parent post, which is currently rated highly but is nevertheless quite wrong in its description of the implementation of the procedure. Others have corrected my misunderstanding, which, if I'm not still mistaken, goes something like this:

      Step 1) $100 are downloaded from John Smith's bank account to user card #U12345.

      Step 2) Smith approaches Adult Store merchant with $80 worth of embarrassingly large and bumpy sex toys.

      Step 3) User Card #U12345 securely transfers $80 to Merchant Card. This transaction takes place off of a network.

      Step 4) Smith walks away with sex toys in black plastic bag. Bag later breaks on the bus, contents come spilling out.

      Step 5) Merchant subseqently uploads large sum of money (including Smith's $80) to bank. Bank is unaware of original sources of money.

      It's the fact that Step 3 takes place without authorization from a central network which makes this anonymous and potentially superior to a regular debit card transaction.

      Please "securely transfer" my mod points from the parent post to this one. Thanx!

      I'm wondering about other form factors now. Would it be more practical to have a user "card" in the form of one of those keychain thingies? Or perhaps a bracelet with a tiny dongle that plugs into the merchant's reader. Further, the user ought to be able to require mandatory PIN usage on his/her card. It won't help if the card is lost, but at least no-one else could profit from your misfortune. Put your name and phone number on the card and it might actually be returned to you. Finally, what's to stop this anonymous transaction from being the basis of a money laundering scheme? And if there is nothing preventing it, what are the odds that this would be allowable in the US?

  • A Cash-Free France with the Moneo Smart Card? Don' (Score:3, Informative)

    by rpiquepa ( 644694 ) on Sunday February 09, 2003 @04:02AM (#5263172) Homepage
    In this column [weblogs.com], you can read what I thought about this. "About a week ago, my bank asked me if I wanted a new plastic card, named Moneo. This card would be dedicated to small purchases, like newspapers or a french baguette. My bank also asked for 10 euros per year for the card..." Personally, I don't think Moneo will be successful except if it's free. For more details, check this BusinessWeek [businessweek.com] article or the official Moneo [moneo.net] website (in french). Roland Piquepaille.(http://radio.weblogs.com/0105910/)

  • Person to person payments (Score:2, Informative)

    by zander ( 2684 )
    What is not immidiately obvious from the story (which lacks any and all technical details) is that the merchent has about the same card as the customer; it can contain a maximum amount of cash and the card reader does nothing but transfer cach.

    A safe encryption based handshaking requires an additional 'master card' with the intelligence to do the transer inside the reader. So its very unlikely your local homeless will walk around with a reader :) But it is possible!

    Point is that the card of the merchent has to be emptied at the bank as well, and why is this important? Well; the bank has absolutely no way of tracking transactions to real persons.

    This is the beaty of the system; in contrary to all electronic payment systems; this is the only one that actually makes your payments more anonymous.

  • We've got our 'Chip' cards already. They're wickedly convenient. 500 Euro limit, reloading machines all over the place, can use them many places - even raunchy ron's and parking meters.

    I don't use chip cards where I would use paper money - I use PIN (my bank account) for these so I will have a limit. The Chip cards are great for places you would ordinarily carry around loose change.

  • Danmønt (Score:4, Informative)

    by dybdahl ( 80720 ) <(info) (at) (dybdahl.dk)> on Sunday February 09, 2003 @04:17AM (#5263217) Homepage Journal
    This was introduced in Denmark a couple of years ago, but it failed to get broad appeal.

    If you want to see how to bring down the amount of cash that people have, you should have a look at the Danish "Dankort" system. It is because of that system that Denmark has the lowest amount of cash in circulation compared to the size of the economy. Personally I almost never carry any cash around.

    http://www.dankort.dk/ (Danish)

    The Dankort system is an online system with identity, but it has been constructed in a way that makes almost anybody able to get it. Of a population of 5 million, there are 3.3 million Dankort. If you subtract the children and the very old people, you'll find that almost anybody uses it.

    Lars Dybdahl.
  • Because the basic Moneo card is anonymous, there are no privacy or identity theft concerns. But if an owner loses his or her smart card, the cash that's stored onboard can be used by whoever finds it -- which is why there's a $107 storage limit.

    Fascinatingly, the article doesnt say precisely who is issuing the card; is it a private company, or the French Government?

    If its a private company, this system will not engulf France without being nationalized. No private company will be allowed to control the method by which all the money in France is spent, and of course, for it to be really efficient, there can be only one system.

    The limit of 107 is just silly. If you have a 500 euro note in your pocket and then use it to light a cigar, thats your business. Limiting the amount that can be lost is absurd; its your money; if you want to put 20,000 on the card, its your risk. A card that cant even take the value of the highest denominated note in circulation (500e) is pretty stupid.

    Chaumian Digicash was superior to this. It really was anonymous, in that the entire system was secret. With this system, all your transactions to and from the card are recorded. There is no advantage in moving your money to the card from your account; move it to cash, and the utility of the final object is the same. Also with Digicash, there were no artificial and absurd limits to how much you could put in your "wallet".

  • Australia's plastic money is much better.. (Score:5, Interesting)

    by Large Green Mallard ( 31462 ) <lgm@theducks.org> on Sunday February 09, 2003 @04:25AM (#5263240) Homepage
    All of Australia's banknotes are made out of plastic. Which gives them the advantage of last a sodding long time...

    Australians or anyone with them.. the first two digits of the serial number are the year of manufacture. I have a $20 made in 1994 and another from 1998. I jut got some 2002 date $20s.. ei, they only need to print new $20s every 4 years :) Granted, $5s last a lot less, but it's still a whole lot better than paper (cotton pulp) notes.

    Of course, they spring around like no-body's business and are absolutely frictionless, but the concept is so cool! :)

    Pictures at -> http://theducks.org/notes

  • In socialist Canada, the card cashes you! (Score:5, Informative)

    by evil_one ( 142582 ) on Sunday February 09, 2003 @04:36AM (#5263274) Homepage
    Seriously though, this is just silly. By now everyone has heard of 'Debit Cards' and I would think that a fair number of /.ers have paypal mastercard debit cards.
    Well guess what?
    Canada has been there for years.
    4 out of 5 stores (or in a mall, every store) has Interac [interac.org]machines. Direct debit, pin protected, and ANY bank card on the interac network works on it. That is every major bank in Canada, almost all the little ones, plus most credit unions.

    Explain how a pin protected card (which is cancelable by phone) is better than this 'new' french system? I mean, their system is just basically a revamp of european phone cards.
    The only benefits the french system has over Interac is anonymity - As for that, we do still have cash for that, or in the case of a true cashless society, just trade in precious minerals. (eg, gold [google.com].)

    By the way, Interac direct payment has been rolled out since `94

  • The Killer App (Score:3, Insightful)

    by Anonymous Coward on Sunday February 09, 2003 @05:03AM (#5263341)
    We have these here in Germany too called "Geld Karte" (Cash/Money Card). They are mostly embraced by the Sparkasse, while most of the major private banks are reluctant to give them to you.

    They are used for some aplications and there talk to add an age authentication system too them for the purpose of proving you age to cigarette vending machines. There is also talk to intengrate Crypto functionality so that you may digitally sign documents with them.

    However in my mind the killer app would be to be able to use them cheaply for micro payments on the internet.

    However to be widely accetable these would have to:

    a) Be secure virtually - no electronic counterfitting

    b) Be anonymous - Imagine Grandma giving the kids some money triggering an automatic I.R.S. audit. Let that happen once and they are out of buisiness

    c) Be cheap. Real money is not for free either since there is considerable labor involved in handing out the money, accounting for the cash and buisiness has to buy insurance against theft.

    d) Hardware has to be cheap too. By law the electronic signature has been available for years how every no one is using it since the cost of hardware is just too high. However with a cheap mass market reader there is no reason why this should no become as widely available as floppy drives are now (Sorry Mac Fans no pun intended). By the way as if did read that there is nothing TCPA can do which can't be done with a smart card reader, accept selling new hardware since smart card readers can be bought as an upgrade...

    Currently there is one big drawback in all of these systems: All of them require the end user to bear most of the cost of deploying them (they have to pay for the class 3 reader and the smartcard), while buisiness saves a lot of money because processing is way cheaper.

  • Tried and failed in Sweden (Score:3, Insightful)

    by MungoBBQ ( 524032 ) on Sunday February 09, 2003 @05:23AM (#5263375)
    A system similar to this was rolled out here in Sweden a couple of years ago - CASH as it is aptly named. Now, about 4 years later, it's all but dead since nobody thought it was a good idea. As far as I can see, the only thing people use these cards for these days is parking meters.

    I think it failed here because of a few simple reasons. People here were actually smart enough to see that a major reason for the banks to try this approach is for them to make more money without any benefit to the customer. Doesn't it sound like a banker's dream? I can hear the banker's going:

    - I've got a great idea! We'll make our customers keep all their money - including their cash - in our bank, but we won't pay them any interest on that "CASH"-card.

    - Sweet! And why don't we charge them a small fee to obtain the card in the first place?

    - They won't know what hit them!

    Sure, it sounds great with a cash-less society, but until the system is free to use and has all the advantages of cash, it just won't catch on.

  • In Switzerland... (Score:3, Informative)

    by UncleAlias ( 157955 ) on Sunday February 09, 2003 @06:07AM (#5263474) Homepage
    We have had a similar system in Switzerland for several years now (about ten, maybe a bit less), which is simply called "Cash".

    I think it comes more or less standard with all bank cards, and it's free (techincally; maybe the bank charges for it as part of its general services, but the name "Cash" doesn't appear on my invoices.

    I've been using extensively for the past year, and while it has some definite advantages, I don't see that replacing paper money for quite a while.

    The good side:

    - It's fairly easy to use; put it into a Cash-aware ATM (most are), transfer up to CHF 200 (ca. USD 150), and then insert it into a Cash-aware machine, hit "OK" and you've paid.

    - No need to have the exact change anymore; very convenient for bus tickets.

    The bad side:

    - Not many places are Cash-aware: bus ticket machines are, some shops are (newsstands, for example), and that's about it...

    - If someone steals my bank card, he or she can empty the card's Cash without any control; but since the amount is, at most, CHF 200 and there is only so many bus tickets one can buy, it's not that big a problem; besides, it works the same with paper money...

    - Although quite fast, the system is not instantaneous: transactions can take up to 10-20 seconds; that's fast, except when the bus doesn't wait...

    - As far as I know, the different national electronic cash systems are not intercompatible; hence, what works in Switzerland will probably not work with the French "Moneo" or Belgian "Proton".

    All things said, it's quite convenient for small purchases and bus tickets, especially the "no exact change necessary" part. but it's still quite limited. Don't expect "Cash"- or "Moneo"-like systems to completely replace your paper-and-nickel money any time soon.

  • Great! (Score:3, Funny)

    by peterpi ( 585134 ) on Sunday February 09, 2003 @06:59AM (#5263551)
    I've thought up this brilliant alternative to money. You'll get these sheets of paper that you can use instead of regular money. No information will be stored on it, so transactions will be completely private. For smaller amounts, little metal tokens could be used. They could be different shapes and colours to help tell them apart.

    Pretty neat, don't you think?

  • How it works (Score:5, Interesting)

    by Paul Johnson ( 33553 ) on Sunday February 09, 2003 @08:08AM (#5263684) Homepage
    These things have been around for a while. They depend on two things:

    1: Secure chip cards.

    2: Public key cryptography. This post assumes you know the basic concepts.

    IIRC the protocol works (roughly) like this.

    1. Card 1 says "I am a genuine card. Here is my public key and a certificate for that key issued by the bank."
    2. Card 2 says "I accept your certificate. I am also a genuine card. Here is my public key and certificate."
    3. Card 1 says "I have decremented my cash register by $5. Please increment your cash register by $5. Signed: Card 1."
    4. Card 2 says "OK."
    This transfers $5 from card 1 to card 2.

    Step 3 is the critical one. If that message gets lost then the $5 is lost as well. Of course a real protocol will include nonces and resends so that a single lost bit won't destroy your money.

    This has applications beyond just replacing cash. People have been looking for a way of making small transactions over the net for years. These cards are potentially it. Plug a card reader into your USB port, put a similar one on a server somewhere, and you can purchase information off the server, paying by the page if you want. Conventional credit card transactions have high fixed costs. The costs on these cards are very low.

    (Actually the server will probably have a PCI card with a high-speed, high-capacity version of the chip. But the principle is the same).

    On security, PKC is the easy bit. Securing chip cards is much harder. If you can spoof a card into accepting messages from something other than a real card then you can forge money untraceably. To do this you either have to extract the private key from a card or find some other way to increment its cash register. Both of these need tamper-proof cards. The techniques for doing this are too many to go into here, but you need to worry about power supply signalling information about the processes going on in the cards, and random errors induced by putting the card in a microwave oven (no, I'm not kidding) giving information away too, in addition to raw physical attacks like stripping off the plastic and using very fine patch leads.

    The biggest weakness is that any card is potentially an entry point to destabilise the entire system. I suspect this is the real reason for the $107 limit: cracking a single card would give you as an individual considerable wealth, but moving that wealth into the rest of the financial system by (e.g.) depositing it at a bank would show up in odd deposit patterns long before you could "forge" enough money to destabilise the economy. Also the individual who does this has every incentive to keep it quiet: not only has s/he committed a crime, but everyone in the know is a potential blackmailer.

    Of course someone might find an easy crack and publish it. This is probably the worst case scenario. The only solution is to recall the cards and go back to cash until the problem can be sorted out. Again, the card limit helps put an upper limit on the cost of this.

    Paul.

  • Ease of use of Cash wins out.... (Score:3, Insightful)

    by Chanc_Gorkon ( 94133 ) <gorkon@NoSPaM.gmail.com> on Sunday February 09, 2003 @08:14AM (#5263702)
    Examples:

    Salvation Army Bucket
    The bum on the corner
    The Hot Dog Cart
    Birthday cards
    Yard Sales

    There are lots of stuff we just drop cash into. Going to a card will make these transactions impossible or too expensive to make it worth your while. Personally, I would not mind having something like this except I already have it....my debit card. If I am making a transaction I don't want the bank to know where I was, I get cash at the ATM. I guess I might be a terrorist if I don't want my bank to know I shopped at Bernie's Pleasure Palace and was buying porn or a marital aide.

  • USELESS! (Score:3, Funny)

    by Eric_Cartman_South_P ( 594330 ) on Sunday February 09, 2003 @02:17PM (#5265676)
    How the hell am I supposed to snort my coke?

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