Security isn’t the killer app for digital identity

by Leave a Comment

[Dave Birch] Over at the London “Internet Identity Day“, there was a fleeting discussion that I thought deserved more reflection. It was about the extent to which secure e-mail or secure document transfer is a driving application for digital identity. I’d been thinking about it a couple of weeks ago because Cory Doctorow’s review of� Tom Watson’s book on the Murdoch “hacking” scandal touched on an aspect of the story that has been bothering me.

But what on Earth are all these rich and powerful people doing sending unencrypted emails? Why do ministers of the government use voicemail servers operated by big, dumb phone companies like Vodaphone, instead of privately maintained Asterix instances run by Parliament’s IT department… How is it that lawyers and clients send cleartext documents to one another, and how is it that ministers and civil servants keep the nation’s most important information on unencrypted hard drives?

[From� Dial M for Murdoch: exhaustive account of the UK tabloids' criminality and the resulting coverup - Boing Boing]

I saw a similar comment in a newspaper discussion (apologies for not remembering where) about the Barclays rate-fixing scandal. A reader wondered why any bank would employ traders stupid enough to commit a conspiracy to e-mail and instant messaging logs that the knew were being monitored unless they were a) genuinely unaware that what they were doing was wrong or b) idiots who didn’t understand how the interweb tubes work. Surely, you would think, if you were a clever trader who want to conspire with peers you would devise some sort of code that didn’t look like a code, a bit like the British fishermen in the cod wars.

From 1928, the British trawlers were equipped with radio and started passing coded messages between themselves to alert each other when Coast Guard vessels were in and out of harbour. “Grandmother is well” meant that the Coast Guard were in port, for example. In an early example of governments attempting to legislate new technology, the plucky Icelanders made it illegal send to coded wireless messages. This had no impact whatsoever, of course: British seafood companies simply devised new code systems for the trawlers to use. Think about it: how on Earth would an Icelandic wireless operator know whether “Tottenham Hotspur are the pride of North London” was a coded message or gibberish?

[From� Digital Identity: Codpiece]

Why didn’t they use secure messaging anyway, just in case rival traders were peeking at their stuff? I may know. A while back, one of Consult Hyperion’s financial services customers was working on a project that they wanted to keep under wraps, so they asked us (along with some of the other suppliers) to encrypt and sign all project documentation. So we all went over to using S/MIME. It took, as I recall, a few days of constant messing about to get the right certificates distributed and installed in Outlook, then we were good to go. It lasted about a day before the customer’s IT department asked us to turn off encryption, because the spam filters at their end were escrowing all encrypted messages because they thought they might be viruses, or something like that. So we turned off encryption and went with signing only. This lasted about a day more, then we were asked to turn that off too because it didn’t worked properly with the corporate e-mail gateway. So we went back to what we were doing before, which was putting documents into passworded zip files.�

OK, so perhaps I do understand why Ministers of the Crown are sending plaintext. Hardly satisfactory, and not only because agents of foreign powers might have access to the Right Honourable Member for News International’s e-mails. With no identity infrastructure, and therefore no workable encryption infrastructure on top of it, there’s nothing that can be done about this. But with a working identity infrastructure, as was pointed out at ID Day, this becomes a straightforward problem to solve: you encrypt e-mails with a key that is backed-up and made available to law enforcement after due process and you sign e-mails with a private key that is kept in tamper-resistent hardware and never disclosed. If hackers, journalists or the council get into your e-mail, it’s all encrypted and they can’t read it. End of. It’s  not rocket science. I’m not saying that technology can completely override traders. For example, we’ve all pressed “reply to all” by mistake and sent messages to people who weren’t supposed to see them.�

A banker at UBS has allegedly cost the Swiss bank an estimated $10m (£6.2m) in fees after he sent an email detailing General Motors’ upcoming flotation to more than 100 people.

[From� Rogue email 'costs UBS $10m in GM fees' - Telegraph]

But what is the demand for secure e-mail, secure messaging and secure storage? After all, secure e-mail has been around in principle from the earliest days of the interweb and still no-one uses it. The idea of the “digital post office” comes round from time to time to build on this.

Australia Post has announced it will create a “Digital MailBox” for every Australian, as of April 2012.

[From� Australia Post launches inbox and cloud storage for all • The Register]

Perhaps the time is right, but I can’t help observing that a great many such initiatives have come and gone. I just don’t think that this sort of thing will be the “killer app” for identity infrastructure. People say they care about security but they send e-mails in plain text, conduct criminal conspiracies on instant messaging and leave files on password “protected” cloud stores. I think we should look elsewhere, at areas where identity security is a real problem. Reid Hoffman made a good point about this in Forbes a while back.

Validated check-ins and reviews: One potential downside of most consumer review sites is that published opinions are dominated by a small, vocal minority. There’s value in getting a broader sampling of people to share their views. A growing percentage of reviews on sites like Yelp and check-ins on sites like Foursquare will over time be tied to actual transaction activity. When you and your friends buy, you’ll be asked via email or text message if you’d like to check-in or provide a review. As a result, more customers will provide feedback and recommendations, and the information they provide will be better validated, in connection with actual transaction activity. A review or check-in will carry additional weight when it’s been validated.

[From� The Credit Card Is The New App Platform - Forbes]

As I have long advocated, linking reviews to wallets is a good idea but it needs a bit of special sauce to ensure honesty: pseudonymity. When you pay your hotel bill, your wallet sends a blinded token to the hotel which then signs and returns it. Your wallet unblinds the token. When you log in to Trip Advisor, or whatever, you can send the token to them. The token proves that you stayed at the hotel, but is mathematically unlinkable. Trip Advisor and the hotel and the other viewers can know for sure that you stayed in the hotel but your Trip Advisor account can remain anonymous. It’s a win-win-win and would put code into wallets that would give us all of the other security we want (e.g., secure messaging) as a byproduct.

These are personal opinions and should not be misunderstood as representing the opinions of�
Consult Hyperion or any of its clients or suppliers

�

�

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

E-money is back

by Leave a Comment

[Dave Birch] A recent Deutsche Bank Research “Banking & Technology Snapshot” on “E-Money” (11th May 2012) says that there are three factors that could lead to an increased importance of e-money in the future. These are:

  1. Innovative mobile payment systems that could lead to a renaissance in the use of hardware based e-money.
  2. The digitalisation of financial services that could boost the use of software-based e-money.
  3. Virtual e-money that could spread rapidly, once started, due to the sheer mass of potential users.

I think that the trends that this analysis draws on are real, but I would draw them together in a different way: virtual e-money and software e-money will grow, wallets will be the means to manage them and the successful wallet plays will have security based on mobile devices that incorporate hardware security. In reality all three of the factors that DB identify are different perspectives on the same central trend, which is money heading off into the cloud, where it will happily circulate under remote control from secure, consumer-owned mobile devices.

If this analysis is correct, then DB are right to expect to see more announcements around e-money in the future, in contrast with the “usual” announcements about banks and mobile operators co-operating to put existing non e-money payment products (i.e., debit cards, credit cards, account-to-account transfer) into mobile handsets. As it happens, we’ve just seen one such announcement.

MasterCard and Deutsche Telekom have announced that they will work together to roll out services across DT’s footprint in Europe… Under the terms of the deal, MasterCard will be working with DT’s payment subsidiary ClickandBuy, which has the e-money license that is necessary to operate mobile payment services.

[From� MasterCard Ties Up With T-Mobile For NFC Mobile Payments In Europe | TechCrunch]

So MasterCard will be using e-money rather than bank products issued by its former members. This certainly does illustrate rather well the point that “three party” non-bank e-money might make sense in a mobile environment when it didn’t in a card-based physical world (which would require all banks and all shops to connect to the single value pool). You can see why DT are happy to go down this route as well. For one thing, it will be far cheaper to operator a payment system under PI/ELMI licences than under banking licenses.

Most of the operators we know in this situation would prefer to be directly regulated by their central bank as an e-money issuer or payment services provider. Doing so gives regulators better visibility into and oversight over mobile money services, and makes it more likely that customers will have more services from which to choose in the financial services space. It’s a win for everyone involved.

[From� Regulating non-bank mobile money service providers | Mobile Money for the Unbanked(MMU)]

I’m going to write some more about the potential for “near banks” in the not-too-distant future, but I’d like to focus on the long-term implications for a moment. In the short term, naturally, the e-money that mobile operators, retailers and others will issue will be euros and dollars and so forth. But in the longer term, I suspect that we will see new currencies arise. In a way, the Starbucks £££ in my Starbucks app that can only be spent in Starbucks is already a kind of “truck”, a kind of private, company money and there’s no reason why these monies might not circulate more widely in the cashless future. But back to tomorrow. Over at Payments Views, Scott Loftesness talks about the impact of the Apple Passbook in terms of multiple closed-loop systems rather than open-loop systems and I strongly suspect that he is (as usual) right about this.

But, it’s important to understand that, as announced today, Passbook appears to be a “closed loop” solution – where the acceptance of the passes/tickets stored in Passbook is also the responsibility of the app developer (think “merchant” or “airline” for now).

[From� Payments Views from Glenbrook Partners — Views and Opinions about the World of Payments]

The ability the phone to pivot multiple closed-loop e-money system means that the barriers to the spread of those systems reduce. Carrying a hundred different retailer, transit, city, sports, festival and other e-money cards in a physical wallet is unappealing, but carrying a hundred different such “cards” in a mobile wallet (especially when they are all using the same underlying APIs) works fine.

Hence the vision. I wander into Starbucks and my Starbucks wallet opens. The account is empty, so the wallet uses the Visa API to reload a tenner from my debit card. I wave the barcode at POS and go on my way. Next door I pop in to Tesco. Now the Tesco wallet opens and reminds me I’ve got a special offer on 2-for-1 fruit shortcake biscuits (this is my vision, remember) so I pick some up, When I get to the POS, I wave the phone and the Tesco Wallet uses the same Visa API to charge to my credit card. I get my club card points, but I also transfer £5 to the Tesco Xmas Club, another e-money account in the same wallet. It may not be the definitive narrative around mobile payments, but it’s a reasonable vision to be getting on with.

So what is the implication of the DB report? It’s that banks should take prepaid “near bank” services seriously and make them part of their roadmap but not only for conventional payments.

These are personal opinions and should not be misunderstood as representing the opinions of�
Consult Hyperion or any of its clients or suppliers

�

�

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

Story time

by 2 Comments

[Dave Birch] We need to have a narrative about what the future will be so that we can share in creating it. I’ve heard more than one conference speaker refer to the way in which “Star Trek” guided the evolution of the mobile phone industry and one conference speaker (me) refer to the way in which “Dr. Who” will guide the evolution of the digital identity industry. There’s a great paper on this called “How the Future Shaped the Past: The Case of the Cashless Society” by Bernardo Bátiz‐Lazo (Bangor University), Thomas Haigh (University of Wisconsin, Milwaukee; The Haigh Group) and David Stearns (Seattle Pacific University). It sets out to explore the relationship between the narrative and organisational strategy.

This paper invites readers to look into how beliefs about future events help to better understand organizational change. Our argument is that the adoption of information technology and the adoption of new organizational forms around it have been driven by shifts in collective ideas of legitimate organizational development. As an example we focus on the establishment during the 1960s of a vision within US retail financial services, namely of the “cashless/checkless society”. The article tells of the power of this “imaginaire” to bring consensus in driving actual technological developments.

I’d never heard this word before, but I love it. An “imaginaire” is an imagined new social order built around the deployment of an emerging, unproven technology in a particular way. It’s not quite the same thing as a vision, as I understand it, because an imaginaire requires more detail, more understanding of how the technology will work and how interacting with it will change the society in which it is embedded. Naturally, this appeals to me. I’m the sort of person who, when they read in the paper that the government is going to install black boxes to monitor all internet traffic, starts wondering how they will work before I start wondering about the implications for civil liberties, taxpayers and novelists.

The reason why I was looking at this paper was that I was preparing some material for a client workshop and I was looking at why people who were in favour of spending money on the development of a card business in the 1960s were in favour of it, and why those against it were against it, if you see what I mean. Reading through the paper, I came across this succinct statement, which I immediately recognised to be a fantastic reflection on the state of mobile payments ahead of my evening out chairing� Mobile Monday in London. The authors say

Successful innovation therefore depends, implicitly at least, on convincing others of the existence of a future in which the innovation is already accepted.

I’m already convinced of a future in which mobile payments are part of the mass market — I’m already curious about the imaginaire (e.g., the rise of alternative currencies on the mobile money platforms) — but how can I share that with other people? Are mobile payments part of the conventional wisdom, or only for people like me? Is it simply too soon to be talking about this?

A recent survey of more than 1,000 technology experts conducted by the Pew Research Center’s Internet & American Life Project and Elon University predicts that by 2020 “mobile payment systems” will gain mainstream acceptance as a method of payment and could largely replace cash and credit cards for most online and in-store purchases by smartphone and tablet users.

[From� Latest Pew Research Survey Predicts Decline of Cash, Credit Cards by 2020]

Of course I agree with this bullish prediction. To me, it seems obvious. The more interesting question is what form mobile-centric payments will take. Taking William Gibson to heart — the future is already here, it’s just unevenly distributed — where can we look around to see plausible candidates for the mass market mobile payments solutions for 2020? And would be even able to see them now? Did people understand how, for example, payment cards were going to pan out?

Within a five year period from 1965 to 1970 the checkless-­‐cashless future had passed from a somewhat marginal speculation to a taken for granted part of the industry’s conventional wisdom. No such payment system was in commercial operation, or had been proven in a pilot study of more than trivial scope. In fact the technology to realise the vision did not yet exist, as a series of failed projects in the financial industry during the late 1960s and early 1970s would demonstrate.

This is where we are with mobile payments today, isn’t it? Mobile payments are now taken for granted as being an integral part of the future landscape. I think we’ve gone further than pilots in some areas, but nevertheless the point is that we can’t point to France or the USA or Germany or anywhere except Kenya and say “look, mobile payments are an incredible success, they are the future”.

There’s no tangible, proven way to get any return on investment for the implementation. So why do it? Credit cards are ubiquitous. Credit cards are fast and easy. Almost all merchants have the ability to process payments via credit card. So why? Why are we solving a problem that doesn’t exist?

[From� NFC Is Great, But Mobile Payments Solve A Problem That Doesn’t Exist | TechCrunch]

That’s a perfectly valid perspective: but remember that people were sceptical about plastic cards once. Until the early 1970s it was not at all clear that the main mechanism for cashlessness would be the plastic card. The invention of the magnetic stripe changed everything. In time the mobile phone will have as much impact as the magnetic stripe, but in a very different way. For one thing, an online world entered through the mobile handset does not need the same kind of standardisation that the magnetic stripe world did. Back then, it made sense to coalesce around a Visa and a MasterCard, because not every shop was connected to every bank and not every shop was connected to every consumer. But now they are.

our world is complex and only ‘one’ mobile payment platform is not enough

[From� Mobile Payments: A Trillion Dollar Industry… Once Everyone Can Actually Make A Payment | TechCrunch]

A sound insight, and I couldn’t agree more with this. Given the new technology, there is no need to have a single universal system any more. My mobile wallet will be more than capable of choosing between multiple different payment methods to select the one that is most appropriate in any given transaction.

There are two big and interrelated questions about how people will behave when they start using electronic wallets on a large scale. The first is whether they will consolidate all their spending into a single account or spread it even more widely than they do now. The arguments seem finely balanced. Those who expect spending to be consolidated reckon that when people are no longer faced with a physical choice, they will simply use whichever card or account has been set as the default. Those who think that spending will be spread more widely point out that phones eliminate the inconvenience of carrying around a lot of different cards, which may prompt some consumers to have more banking relationships.

[From� Mobile payments: A wealth of wallets | The Economist]

On balance, I come down on the latter side, largely because I think that wallets will be shaped more by the retail experience (which varies greatly from environment to environment) rather than by the payment experience. But I don’t know enough about the future of retailing to construct a narrative around that. Some people try to do it by looking at Japan. While I always make a point of saying that the Japanese mobile payments market is special and not a template for the UK (or, for that matter, the US) it is nonetheless interesting to see what is going on there. The latest survey results I’ve seen (from the end of March), about a third of iPhone, Android and other smartphone users say that they have already used “electronic money” system and another 12% say they are planning to use them. Note, though, that the iPhone doesn’t currently have the electronic money (i.e., NFC) interface, but (and I’m paraphrasing a machine-assisted translation here!)

28% of respondents said that when an “iPhone equipped with electronic money function released” they will consider replacing their current handset with it… so it was confirmed that the presence or absence of the electronic money interface is a selection criterion when buying smartphone.

[From� Japan Mobile Payments Survey by Wireless Watch Japan]

Again, I’m paraphrasing a machine-assisted translation.

Of the people who have used electronic money, 73% have used Edy, 37% Suica and 27% nanaco. Where do they use their electronic money-equipped mobile phones? Predominantly at convenience stores (73%), vending machines (48%), transit (37%), fast food 34%. These electronic money systems are all prepaid and 51% of people load them from payment cards, while 39% load them in-store by handing over cash.

[From� Japan Mobile Payments Survey by Wireless Watch Japan]

The survey also says that 36% of smartphone users pay with mobile money at “Regular Kip”, but I couldn’t figure out what this meant – can any correspondent help? I would love to have regular kip as part of my imaginaire. By way of contrast to the Japanese figures, American figures would appear to support the sceptics.

The ability to make mobile payments is “very unimportant” to about half of credit card customers with smartphones, Lightspeed found. Only about 15% of the customers surveyed said it was somewhat or very important to them to be able to pay with their smartphones.

[From� Mobile Payments Very Unimportant to Consumers - American Banker Article]

You have to wonder about this sort of thing. Are these real insights? Almost no-one in the US has ever used their mobile phone to pay for something in a shop, so why anyone would ask them about it isn’t clear to me. These results don’t mean that mobile payments will fail in America, they mean the general public has no narrative about mobile payments, and I hope to change that (although I don’t know how yet).

By the by, the paper is particularly fascinating (to me, at least) because it touches on something that I’ve written about several times before but in a way that begins to explain rather than merely observe.

In contrast, the vision of a “cashless society” appears to have originated within the world of business and moved only later into the realm of fiction.

A few years ago I had the good fortune to bump into the author Bruce Sterling, who was kind enough to let me� interview him for our podcast series. In the interview, I asked him why the future fiction about money was so unimaginative (it doesn’t seem to go further than the “galactic credit”). He said it was because it was boring. Indeed the authors observe that

On the other hand, readers and writers of science fiction were perhaps more interested in rockets and physics than they were in banking, economics, or organisational innovation. When a fictional society was cashless it was generally also a moneyless utopia

So what is the narrative vision for the future of payments that we can all share? If there is one, I suspect it’s more about biometrics than mobile phones.

P.S. The Munich paper notes that the phrase “cashless society” appears to date from 1958 although the concept is, of course, ancient. See for example,� Edward Bellamy‘s 1888 sensation “Looking Backward 2000-1887″:

Yet the book has special place in my canon because the time-traveller is told by his host, the good Doctor Leete (who has a daughter called Edith: E. Leete, geddit?), that there is no such thing as cash in the year 2000.

[From� Digital Money: 1886 and all that]

P.P.S. It also refers in passing to management consultants creating “expert knowledge and client ignorance” to promote their services. That’s not imaginaire, it’s marketing, which is different.

.

These are personal opinions and should not be misunderstood as representing the opinions of�
Consult Hyperion or any of its clients or suppliers

�

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

Press the red button for financial inclusion

by Leave a Comment

[Dave Birch] I can’t remember exactly when it was, but one of the first conference papers that I ever presented relating to the internet was called “Smartcards on the Superhighway”. I think it was in 1995, because I subsequently turned it into a� journal paper that was published in The Journal of Internet Research 7(2), p.116-119 (1997). I can remember putting it together, because we’d been asked by a couple of financial services customers to take a look at the nascent internet and see if it might be used for their products and services. One of them, as I recall, was the London Stock Exchange, and I went off to talk to some people—including Forum friend Steve Bowbrick, who was at that time running the first Internet Cafe in London, called� Cyberia —about what wasn’t even called electronic commerce yet.

My conclusion was that the best way forward would be to leave the IP infrastructure alone and forget about trying to build security into the network, because the dynamism of the Internet was so critical to its success. The fact that anyone could connect to it and send anything they want to anyone they wanted to was a fantastic, unparalleled landscape for creativity. Instead, I thought, if we wanted to use the Internet for business, for government, for “serious” communications, then it would be better to secure the end-points, and since software would never be adequate, that meant tamper-resistant hardware. Since the only tamper-resistant hardware I could see in the mass market was smart cards, I drew the inevitable conclusion: we’d do business on the web using smart cards. There were three ways, I thought, that this might work.

  1. We could take smart cards issued by banks, governments and others and connect them to our PCs using smart card interfaces. I was seriously wrong about this: I figured that as a smart card interface would cost a couple of dollars, we’d all have them, but it really didn’t work out like that. I don’t think I ever got a working smart card reader plugged into my Mac ever, except the one (that worked perfectly) from the Britney Spears’ fan club.
  2. We could use the smart cards inside mobile phones, the SIMs, in some way. Some of the projects we were working on at that time were for what was then Cellnet (now O2) and the precursor to T-Mobile (on things like prepaid services) so I didn’t think that that was much of a prediction. It seemed obvious that phones would become important payment devices.
  3. My final vector was TV. We’d done a fair bit of work on satellite data transmission and digital TV. Since I could see that set top boxes would use smart cards for subscriber management, I thought that (as in the case of the mobile phone) these smart cards could be used for identification and payment as well as access control.

I think this analysis has held up pretty well over the years. I’ve written a few times that I thought that digital TV deserved more attention as a channel but for one reason or another it hasn’t really taken off. Where are we now? If my remote control were to sprout an NFC interface so that I could buy stuff online by just tapping my phone or contactless card on it, as they have in Japan, then I would unhesitatingly use it. But I’d also use it if the telly caused a message to pop up on my iPhone asking me for a PIN. Either way, the combination of the TV and the mobile looks terrific. Television itself has changed over that time as well. My kids watch TV on their laptops or iPads, not in the living room, and the living room is now the province of the “smart TV”. Well, sort of smart TV.

Estimates at the end of 2011 from retailer John Lewis suggested that no more than 15 per cent of Smart TVs are ever actually plugged in to the web.

[From� One in four ‘abandoning scheduled TV’ - Telegraph]

My smart TV is fully plumbed-in, as is my smart blu-ray player, but I never use either of them online because I have an Apple TV and that works much better. But the general trend is there. TV has gone digital (the analogue signal has now been switched off in the UK) and it is going connected.

What will you do with your connected TV? I imagine that one of the things you will do is buy stuff, so bringing payments to the channel is vital. Consult Hyperion has done plenty of work on this in the past (we worked on the Sky Barclaycard, for example) and we put forward a number of idea for using one-time password, remote controls and even NFC on different TV-related projects.

[From� TV’s times]

Perhaps the likely trajectory is one where digital TV is used to deliver financial services around a particular niche that is not well served by the web, where the combination of convenience and security forms the right balance. And so to the point! The London Rebuilding Society (LRS) and Consult Hyperion have been awarded funding by the Technology Strategy Board (TSB) to explore the use of the television as a channel for payments for socially-excluded groups, using both bank accounts and pre-paid “jam jar” accounts to explore the relationship between financial and social inclusion. The project’s aim is to help the 1 million unbanked people and the further 2.5 million people in the UK that use the very basic form of bank accounts. These basic accounts can often impose extra costs of up to £1000 per annum on households. Additionally, some 12 million bank customers per year pay charges for going overdrawn or making unauthorised payments. Current solutions to the problem of financial exclusion are not working, and these low income and vulnerable households are paying the price, especially as mainstream providers of credit are moving out of the personal loans market, and high cost lenders and loan sharks are stepping in.

“We want to turn the way retail financial services are done on their head, said Naomi Kingsley,” The London Rebuilding Society. “Instead of providing off the shelf products which are often socially useless, we design products to meet the needs of those excluded from the mainstream. If it works for those at the bottom of the ladder, you can bet the mainstream will follow, so we’re pleased to partner and utilise Consult Hyperion’s experience in payments to help make this concept and working reality and change the lives of the millions that have been let down by the current financial system.”

The project team will develop a working prototype of a standard EMV prepaid card account that users can manage through an IPTV (Internet Protocol Television) set-top box, using a contactless interface on the TV’s remote control. Account holders will have full account management capabilities via their television screen, enabling them to track and manage their finances and manage regular payments and bills on a standard pre-paid card account.

“Digital technologies are opening up new opportunities to tackle financial exclusion,” said Margaret Ford, Consult Hyperion. “We’ve seen mobile phones transform the lives of people in Africa and other developing countries, so we’re looking forward to using our expertise in digital payments and partnering with The London Rebuilding Society on the HomePay project and help people here in the UK. The ”in-home” service will allow users to make transactions, pay bills, and manage their money – all via their TV sets (and other platforms too, including smart phones and game consoles). Plus the pre-paid account offers greater control, convenience and autonomy to potentially vulnerable people.”

Currently at proof of concept stage, a prototype will be developed, and then working in partnership with groups such as Payments Services Providers, charities and Local Authorities the project team will run field trials, initially with older people, in association with Social Landlords. Finally through evaluation, the team will carry out further development of the solution during further field trials.

What’s envisaged is a prepaid “near bank” account with a companion chip and PIN card that can be used to access a range of financial services via the set-top box. One might imagine, for example, that an elderly person might gain access to their account by simply tapping the contactless chip and PIN card to their remote control, thus combining the convenience of the big screen and familiar controls with the security of the chip. I’ll write more about “near banks” shortly, but suffice to say that one of the key roles envisaged for such a service is to handle welfare payments to excluded groups. For such groups the PC and the web are inappropriate and (without, I hope, caricaturing) for the young excluded the mobile is the preferred channel for transactions whereas for the old it is the TV. If we can bring them together, we can make a big difference in the UK mass market for financial services.

We kicked the project off with an evening event in June with Forum friend Sir Brian Pomeroy, Chair of the Financial Inclusion Task Force (and previously chair of the Payments Council), who opened the discussions by setting out some of the issues and opportunities around the dynamics of exclusion, the context of an ageing population, the imminent transition to the new Universal Credits system and so on. We then had breakout groups—including organisations ranging from the Department of Work and Pensions and American Express to Everything Everywhere and IDEO—to talk about different aspects of using digital TV to overcome exclusion and come up with a few ideas for us to feed into our design process. It was an excellent evening, by the way, and I’m very grateful to my colleague Margaret Ford for pulling it all together with our friends from LRS.

This isn’t the place to go into the technology discussion—we’re busy working on that right now—but we hope to have the IPTV box specifications finished later in the summer and then the project will move on to a small-scale LRS pilot with around 10-20 households in East London. The project will then be looking for commercial organisations to get involved (some already are) with future roll-out, so if you are interested by all means get in touch.

These are personal opinions and should not be misunderstood as representing the opinions of�
Consult Hyperion or any of its clients or suppliers

�

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.