Many people know, even if they don’t understand, my attitude towards electronic banking. I cannot be persuaded that any form of financial transaction over the Internet can ever be deemed totally safe and the Zeus virus, which targets – and empties – online bank accounts for those silly enough to continue using Internet Explorer first emerged three years ago and has now mutated to Zeus v3. I still, after many years, still even hesitate in passing credit card data across the web.
I am still even more hesitant about the use of debit cards. When the players involved are all so confident that their systems are totally secure it becomes an open invitation to hackers and con artists, who will use every possible gray cell they have just to prove the bankers wrong. That would be of no account to you or me as a user except that the rules of liability that exist with credit cards are turned on their head with debit transactions. Because the systems are so safe, the players say, it must mean that any transaction was created by the cardholder. Consumer beware…
I’m even reluctant to give up on good old fashioned paper. Every month, it seems, one or other of those businesses that I owe money to offers to relieve my paper burdens – and save trees – by converting my invoices and statements into online form. Some even tease me that I can save a month’s payment by going along with it. They don’t tell me that I would need to print out every piece of information anyway otherwise those responsible for collecting taxes will likely not be amused by a failure to justify an expense.
The same holds true even for the filing of taxes. If you ever think you might need a mortgage down the road file your taxes on paper. Pulling copies out of your files will be a great deal easier, and faster, than trying to get copies from the authorities when you need them.
Just a few days ago I tried to pay a European bill online using a MasterCard issued in North America. Everything went swimmingly until the secure website, operated by The Royal Bank of Scotland, asked for a confirming security code for my card “that will not be passed on to the merchant.” That was good because the code was and is a complete mystery to me: back to an old-fashioned check and the mail for that bill.
Europe, particularly the UK and – of all places – Turkey, has now become big into payment of accounts using mobile phones. On the theory that nobody (that is, aged eighteen to thirty-five) uses phones just to make phone calls (except good old Luddite me) systems have evolved that they are calling “contactless” transactions. I don’t get the use of the word contactless, but I presume it means your phone and the merchant’s terminal talk to one another by RF which, of course, means that the system is going to be vulnerable.
The major players in what is going to be a North American copy of the European system appear to be AT&T and Verizon with a minority interest in the operation from T-Mobile. (Why has the word monopoly not been raised so far?) The opportunity, they believe, is to hit Visa and MasterCard and their $2.45 trillion (2009) market. To complete the money side of the transactions the combined carrier operation is looking to use the number four house, Discover, as its processing partner – together with the UK bank operation of Barclays.
Between them, Visa and MasterCard are reported to currently handle 82% of the general purchases of consumers in the United States, both credit and debit. It is a big target for the cellphone carriers.
But Visa, certainly, is not likely to allow such vast amounts of business to just disappear. It is reported that they are also in talks with the likes of DeviceFidelity of Richardson, TX. That company already has a slip-on phone case for existing phones that convert them into a “contactless” device.
Presumably Visa and MasterCard could still have the upper hand in this battle royale if they move fast enough. They have the retailers already identified and signed up and with the DeviceFidelity, or similar, device the consumer would not have to invest in yet another phone with the embedded smarts for transactions. However the new consortium – if that is what it is – has the advantage that they know who the phone users are and how to contact them with their own text and voice message marketing ploys…
I’ll be watching from the sidelines with my checkbook, envelopes, and stamps.
