June 11, 2013 – In April London hosted an event focusing on digital money and electronic payments. Tomorrow’s Transactions is organised by Consult Hyperion, a London based IT consultancy specialising in secure electronic transactions and this year was the 16th event. The two-day programme covered a range of topics including cashless future and mobile wallets, new transaction technologies, Islamic efinance, payments in social contexts and new types of transactions.
In an opening session, Tillman Bruett, from the UN Capital Development Fund, gave an overview of the work conducted by the Agency aimed at facilitating access to public financial services for individuals and small enterprises in the developing world, where access to cash or formal financial tools is restricted. The Agency is committed to a global movement from cash to electronic payments as a more cost effective, secure and transparent method of facilitating transactions, and to that end, with the help of local governments, pilots various sub-national and public finance management systems in the form of electronic payment programmes.
In Mexico, for example, welfare recipients who were paid electronically saved 77% in travel costs in comparison to those paid at central cash depots. In Brazil, electronic distribution of funds from the social welfare programme for the poor, known as Bolsa Familia, helped local governments cut administrative costs from 14.7% to 2.6%. Haiti was cited as another example where, after the 2010 earthquake – when the use of mobile money was introduced – incidents of theft of cash transfers fell by more than 50%.
Tillman finished his presentation by emphasising that these programmes are impossible without full support of the local government so they must lead the change.
Forum discussions however did not centre just around the benefits of electronic payments and Sebastian Taveau from Validity Inc, which manufactures fingerprint sensors, highlighted some of the problems and challenges of cashless transactions in his presentation entitled ‘Who Are You Again?’
He began by surveying various user authentication options available today for electronic and mobile payments, including passwords, PINs, voice authorisation as well as facial and fingerprint recognition.
He then went on to provide various examples of the vulnerabilities of each and how each one of them can be compromised. Whilst he concluded that authentication based on biometrics currently provides the best identification method, he emphasised that there is still much room for improvement, and the industry must innovate in order to provide a safe environment for electronic and mobile transactions.
The final highlight of the Forum came from Mark Brulé of the Royal Canadian Mint on their digital cash solution – MintChip. The idea behind MintChip is to deliver a cash-like product that costs less to transact than cash-based or electronic payment solutions. The digital currency takes the form of a secure smart card chip which is inserted into computers and mobile devices and is then used to make payments either online or in stores using a digital key and signature verification. The programme is backed by the Government of Canada and the Mint is currently testing its business models with stakeholders in the payments industry to see how the programme could function both in Canada and abroad.
Several panel discussions focused on mobile wallets and the new types of transactions but surprisingly little was said about the so-called war between cash and electronic payments, or the general relationship between the two. A handful of speakers, however, recognised without hesitation that despite benefits and challenges present in both, in most societies and economies both cash and cashless transactions will continue to coexist and operate side by side.
This article was taken from the May issue of ‘CurrencyNews’.
You find more about Tomorrow’s Transactions here.
In particularly you might be interested in their podcasts …
… or the forthcoming 17th Forum 2014.