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Money2020 was pretty different this year. I’m glad I went, it remains one the most important events in our calendar and it’s a fantastic opportunity for Consult Hyperion folk to meet up with all of our key customers and soon-to-be customers. And I’ll go again next year. But… it’s not like in the old days. Money2020 has matured into a mainstream business event. It’s no longer a place where people go to see fascinating presentations on what a blockchain is or how P2P lending works. It’s not longer a place where people go to watch passionate debate on panels full of conflicting views of the future. It’s a place where people go to do serious business. Here I am, for example, engaging in an in-depth discussion about the business opportunities for Payment Service Providers (PSP) because of the European Commission’s Second Payment Services Directive (PSD) open API provisions on the retail payments ecosystem in the UK, in the light of the UK Treasury’s parallel initiative, the Open Banking W

xxx Half of adults in Britain now carry less than £5 in cash in their purses or wallets amid a surge in popularity for online shopping and contactless card payments, new research shows. From Cashless society: Average Briton now carries less than £5 Surprisingly, the same survey showed that 7% of Brits had more than £50 on them, which I thought surprising.

xxx This rising phenomenon of frustration is what executive general manager of Australia Post’s Trusted eCommerce Solutions division, Andrew Walduck calls “identity friction” From Would you trust a digital identity? | The Mandarin xxx

xxx Witness protection in the age of Facebook is a whole lot more complicated because protecting your privacy in an online age is a minefield From  Witness for the prosecution | Consult Hyperion xxx xxx An identity service founded on the principles of post-modern relativism thus has no problem dealing with the multiple identities. In essence, it would treat all identities as pseudonyms. The use of the pseudonym that happened to coincide with your “real” name would not be a special case. From Witness for the prosecution | Consult Hyperion xxx

xxx A few forward-thinking banks, such as U.S. Bank, BBVA and USAA, have been exploring opportunities to themselves act as identity providers. They have to know everything about their customers under anti-money-laundering regulations, but other businesses don't. Netflix, for example, may need to know that someone is old enough to view adult content, or located in a jurisdiction where certain material is not under copyright restrictions, but it doesn't need a birthdate or a street address. From Wells Fargo Fiasco Lays Bare a Broken Identity System | Bank Think xxx

xxx If you are a spy, or an undercover policeman, or in the witness protection programme, or perhaps even a restaurant critic, you may have perfectly legitimate reasons (in some cases very literally a matter of life and death) for wanting one identity asserted over another. From Witness for the prosecution | Consult Hyperion xxx

For many, many years I have had a John Lewis MasterCard. It gives cash back in John Lewis vouchers and is our preferred card for household spend. For what seems like the last century, when I sit down to check the credit card bills once per month I have paid    So, I logged in and sent a few grand to my John Lewis account, logged out and went on my way. I got a text message from my bank saying that the few grand had been transferred and forgot all about it. A couple of days later, I logged in to 

It’s an old meme on this blog, but I think it is essentially true that the Big Brother of Orwellian nightmare isn’t really the government, who do their best to spy on us all the time in order to track down people who post abusive tweets and such like, but us. We are Big Brother. The mobile phone and the Internet have combined to I’m sure most people, as I do, assume that if they are in a business meeting them someone will be recording them on a pen with a movie camera in it or through their glasses or whatever. But what is to be done?. I remember a super story about this that I saw in a newspaper a while ago. Some Austrian wildlife photographers had set up cameras in a forest in order to capture exotic forest creatures going about their business, but instead caught an Austrian politician up to his Members of the Carinthian Hunting Society in southern Austria are accustomed to observing animals in the wild, such as the western European red deer or wild boar, with the help of cameras

xxx In an interview with Nikkei news agency, Apple CEO Tim Cook said the company intends to use its products – Apple Pay, iPhone, and Apple Watch – to become “a catalyst for taking cash out of the system.” “We don’t think the consumer particularly likes cash,” he said. Cook also said From Apple Promotes A Cashless Society In Japan (AAPL, SNE) | Investopedia xxx

xxx The blockchain does not solve this problem. It records a decision, but it does not record the circumstances. From Distributed proof of jerk – Medium xxx

xxx I've talked before about how privacy is not a "thing," it's a tradeoff. From Privacy Is About Tradeoffs... And Things Go Wrong When Those Tradeoffs Are Not Clear | Techdirt xxx xxx a big problem is that the tradeoffs aren't as clear or as explicit as they should be. From  Privacy Is About Tradeoffs... And Things Go Wrong When Those Tradeoffs Are Not Clear | Techdirt xxx

xxx “We would like to be a catalyst for taking cash out of the system,” Cook said. “We don’t think the consumer particularly likes cash.” From Apple's Next Goal: Killing Paper Money Once and For All xxx

xxx Chris Grayling said by the end of 2018 everyone should be able to travel with a ‘flick of a card’ or the ‘touch of a mobile phone’. He said passengers should never have to queue again for a ticket, and should be able to buy them from the comfort of their home or while enjoying a coffee at the train station. From Transport Secretary says passengers should be able to pay with a 'flick of a card' | Daily Mail Online xxx

xxx Criminals blew up 492 cash machines across Europe in the first half of 2016, an 80% increase on the same period the previous year, according to figures from the European ATM Security Team (East). Most of the attacks used gas, although 110 involved solid explosives, says East, with hits causing an average loss of EUR16,600, although this does not take into account the significant collateral damage done to equipment and buildings. From Surge in explosive attacks on European ATMs xxx

xxx As of today Seqr customers in the UK are now able to quickly and simply link their bank account to the Seqr app and make payments directly from their bank account. From Seqr launches contactless payments service in the UK xxx

snippet Speaking of the direction where the disruption will come from, Yermack sees three potential players. These include challengers (complete outsiders looking for disruption); collaborators (like Overstock and R3); and regulators (countries like the UK, Australia, and Canada). He was optimistic that regulators might be the most active agents of change, even going so far as to mandate changes that enable the technology to be used more broadly. [From | Could Bitcoin Be the Future of Blockchain Post Trade? ] snippet

As I always tell everyone, the fastest way to learn is by arguing with smart people. So I particularly enjoyed arguing with old chum Ian Grigg about the relationship between cash use and tax evasion. I decided to take the time to go and research some up-to-date figures. The average bank spends £40m a year on KYC Compliance, according to a recent Thomson Reuters Survey, which also revealed that some banks spend up to £300M annually on KYC (Know Your Customer) Compliance and Customer Due Diligence (CDD). [From  The spiralling costs of KYC for banks and how FinTech can help | ITProPortal ] So let’s say a £1 billion for the big four and another £1 billion for the rest. So £2 billion in KYC. And that doesn’t include (obviously) the £5 billion that the UK Treasury estimates that UK banks spend on "financial crime compliance" (which I assume means AML, CTF and PEP). So… that’s something like £7 billion on compliance and presumably tax evasion is one of the main crimes that it i

snippet Big questions remain for all these guys about security. How much of the data used for verification will be kept? How will the data be protected? To what standard? [From net.wars ] snippet

Some people really can seen into the future. 50 years ago this was already clear In 1968, Paul Armer of the RAND Corporation testified in front of a U.S. Senate subcommittee about his concerns for privacy in the future. [From The Privacy Dangers of a Cashless Society Were Clear Over 40 Years Ago ] snippet snippet The first is that computer technology is introducing order-of-magnitude reductions in the cost of collecting, transmitting, and processing information. [From  The Privacy Dangers of a Cashless Society Were Clear Over 40 Years Ago ] snippet snippet Second, centralization of data is usually a concomitant of computer use. The payoff to successful snooping is much greater when all the facts are stored in one place. Though most of the data to complete a dossier on every citizen already exists in the hands of the government today, it is normally so dispersed that the cost of collecting it and assembling it would be very high. [From  The Privacy Dangers of a Cashl

xxx The technology that repelled the hackers was a style of software programming known as formal verification. From Computer Scientists Close In On Perfect, Hack-Proof Code | Huffington Post xxx

xxx American money is private. Sweden has embraced cashlessness more readily in part because it finds the value of currency in the transfer and velocity, the social path it follows, the bonds it traces. It’s social: a network conception of wealth. From Imagining a Cashless World - The New Yorker xxx

xxx Last summer brought Sweden’s first Swish mugging, when two thugs beat up a man and forced him to Swish them. The criminals were rapidly identified by their account. From Imagining a Cashless World - The New Yorker This has to be a candidate for the most stupid crime of the year. I realise it is up against some pretty stiff competition - I absolutely love Drew Curtis’ Fark and some of the crimes curated there are jaw-dropping but, I mean… come on.   xxx The commission is on its third day of vetting traffic police officers in Mombasa where most have been found with huge M-Pesa transactions. From  Police officer on Sh45,000 salary moves Sh100m via Mpesa - Politics and policy Who knew a life in public service could be so rewarding?  xxx In other cases, rogue officers open mobile money outlets where an alleged offender is given the agent’s number and told to withdraw bribe money from their accounts — instead of sending. One does not need to be anywhere near the agent’s ph

xxx Swish, a peer-to-peer service like Venmo, launched in December, 2012. Less than four years later, it is used by half the Swedish population and by ninety per cent of adults under thirty. From Imagining a Cashless World - The New Yorker xxx

xxx Credit and debit cards and e-money make up only 17 percent of the Japan’s retail consumption, versus 85 percent in Korea, 56 percent in Singapore and 35 percent in India, according to a 2015 report by the credit association. Usage in the U.S., which includes data only for credit and debit cards, exceeds 40 percent. From Music Fans Start to Rock Japan's Cash-Loving Economy - Bloomberg I thought about a couple of things on reading this. First, it’s interesting how Japan (like Germany) is very cash dependent. The second is that the US doesn’t have e-money.

While I was behind enemy lines at  Security Printers 2016 , I picked a copy of a report from Guillame Lepecq’s Cash Essentials . One section of the report talks about the European Commission’s 2010 recommendation on Legal Tender, which I’ve written about before. A bank person mentioned to me that they think the European Commission’s recommendation on legal tender (22nd March 2010) is, as he put it, “strange and undesirable”. From  Tender moments | Consult Hyperion After I’d taken the time to read and reflect on the recommendation, I posted a more sober and balanced perspective, explaining why the recommendations are wrong. the European commission published a bonkers recommendation concerning the legal tender status of the euro From  Electronic legal tender | Consult Hyperion One of the main reasons that I thought that the recommendations were bonkers is because they have no strategic context and no economic purpose. They are wholly political. As Norbert Bielefeld of the E

The accountants PwC have published a report that lists the ten most important technology-driven forces that will shape competition in the financial services industry by 2020 for financial institutions. They say that these are: FinTech will drive the new business model The sharing economy will be embedded in every part of the financial system bringing together those who have excess capital with those that need financing, leading to the disintermediation of traditional lending models Blockchain will shake things up Digital becomes mainstream 'Customer intelligence' will be the most important predictor of revenue growth and profitability Advances in robotics and Artificial Intelligence (AI) will start a wave of 're-shoring' and localisation The public cloud will become the dominant infrastructure model Cyber-security will be one of the top risks facing financial institutions Asia will emerge as a key centre of technology-drive innovation Regulators will turn to

xxx he Financial Conduct Authority has promised to play an active role in the development of regulatory technology after an “outstanding response” to a consultation on the issue. From FCA pledges to act as catalyst for ‘regtech’ - FTAdviser.com xxx

xxx The technology that repelled the hackers was a style of software programming known as formal verification. From Computer Scientists Close In On Perfect, Hack-Proof Code | Huffington Post Have the Department of Defence only just heard about this? My colleagues at Consult Hyperion were using this 30 years ago to my certain knowledge and we used 20 years for Mondex.

xxx Mr Stephen Mwaura, CBK’s Assistant Director National Payments System informed a plenary at the exhibition that up to Sh100 billion is transacted daily through Real Time Gross Settlement (RTGS)-the continuous (real-time) settlement of funds individually on order basis. The amount transacted through RTGS far outstrips about Sh15 billion that is transacted daily on the M-Pesa platform. From Kenya : Kenyans transact Sh100b daily through Central Bank’s RTGS - The Standard This is an astonishing statistic. The retail payment network run by the telco carries 15% of the value of the central bank’s RTGS! When you consider the average transaction sizes (the RTGS carries interbank payments, remember) this means that a very high proportion of the economic activity in the Kenyan economy is going through mobile phones.