- Micro-Chip Implants Aid Cashless Society & The Near Future
Pastor Dale Morgan
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Micro-Chip Implants Aid Cashless Society & The Near Future*
Added: July 20 2007 7:19 AM
New technology killing off cash
By Jane Croft in London
Conrad Chase, British co-owner of the VIP Baja Beach Club in Barcelona,
makes an unlikely human debit card.
Mr Chase and almost 100 other clubbers have opted to have tiny data
chips implanted surgically under their skin. When they want to buy a
drink, they simply wave their techno-enabled arms across the counter.
The chip, made by the VeriChip Corporation, is only the size of a grain
of rice but can transmit an ID number to a scanner allowing money to be
taken from clubbers’ bank accounts.
Mr Chase may be an extreme example but he demonstrates a wider point:
Britons are rapidly embracing the cashless society. The Association for
Payment Clearing Services, the UK industry body, forecasts that in less
than a decade fewer than half of all payments will be made by cash.
Banks, including HBOS, HSBC, Barclays and Royal Bank of Scotland, are
surfing the cash-free wave by introducing new credit and debit cards.
Customers will be able to pay for items under £10 by tapping the cards
on a terminal at the till – much as they would a transport fare card.
Sandra Alzetta, head of innovation and acceptance at Visa Europe, says
this will speed transactions:.
“Until now, cash has been king. Other methods have been too slow or too
expensive for small ticket items with values of less than £10,” she
said. “But contactless payments are much quicker than cash. If you’re
buying a coffee or doing a grocery top-up, speed matters a lot.”
Payment by mobile phone is also starting to take off.
This week, the Post Office announced an electronic money-transfer
service that allows recipients to receive funds using a bar code sent to
a mobile or email address.
The service is intended to allow companies to distribute promotional
incentives and cash payments for less than the cost of a cheque.
Companies send a reference code by text message or email, which
customers take to any UK post office to receive instant payment.
Visa is already testing a system in France that will allow consumers to
pay for goods via mobile phone. In Britain, items such as parking and
London’s traffic congestion charge can already be paid in this fashion.
Another way cash is being edged out is through pre-paid cards that can
be loaded up with cash and used like a credit card. PSE Consulting, the
European payment consultancy, estimates that the total number of
pre-paid cards issued in the UK will rise from 2m currently to 44m by 2010.
Those who cling stubbornly to pounds and pence may even pay a price for
their intransigence. Some utility companies have already started to
penalise households who settle their bills by cash or cheque. BT has
introduced a £4.50 charge for the millions who do not pay by direct debit.
But the international experience suggests that Britain can expect even
more striking developments in the future. A “pay-by-mobile” system
already operates in Japan. In Texas, 500 people are taking part in a
trial using a MasterCard PayPass to buy items from 7-Eleven stores via
Nokia mobiles. Customers tap their pass or phone on to a specially
equipped merchant terminal.
But not everyone believes that cash has had its day.
Jonathan Charley, vice-president of financial services at the business
and technology company EDS, questions whether retailers will be willing
to join the “tap and go” revolution if they have to bear the costs of
rolling out the system.
Commenting on Visa’s declared wish to turn the 2012 London Olympics into
a cashless event, he said: “I think a cashless Olympics is a good vision
but will not be achieved unless retailers and small businesses have the
devices to read cards. Who is going to be paying for the devices and
using the service – the consumer, retailer or the banks?“
He added that the contactless card scheme also assumed that consumers
had a bank account. “The challenge is that the contactless scheme [in
London] can’t be used by those who don’t have a bank account. A whole
swathe of people could be excluded from being able to take advantage of
these new services.”
Nicola O’Reilly of the National Consumer Council said: “We have concerns
around security and the ability of consumers to keep track of what
they’re spending, which is an essential part of budgeting. If any of
these systems are only available to credit-card holders that would be
unfair to those who do not have cards.”
Matthew Knowles, from the Federation of Small Businesses, pointed out:
“Small businesses would need to know that the systems were secure and
they would not be liable if there was fraud in the system. We would also
need to make sure small companies were not disadvantaged if they didn’t
have the technology.”
Copyright The Financial Times Limited 2007