The bank fraud blame game

[R. Hirschfeld]

> Date: Tue, 3 Jul 2007 10:01:19 +0200 (CEST)
> From: Stefan Lucks <lucks at th.informatik.uni-mannheim.de>

> BTW, Peter, are you aware that your device looks similar to the one 
> proposed in the context of the CAFE project? See
>    http://citeseer.ist.psu.edu/48859.html
> 
> This has been a more ambitious project, not just supporting secure banking 
> applications at an insecure host PC, but rather a digital wallet.
> 
> Nevertheless, it may be interesting to study why the project failed (or 
> ended without follow-on projects). I have no quick answer to this 
> question, but as much as I understand, the banks where just not interested 
> in deploying such a device. I guess, it was much too expensive at that 
> time. Instead, in Germany we got the "Geldkarte", a simple and very cheap 
> smartcard for payment purposes with neither a display nor a keyboard. The 
> "Geldkarte" has been around us for about ten years, and, as far as I can 
> tell, hardly any customer is interested in using it.

There was a follow-up project called OPERA that implemented a user
trial of the CAFE system on the premises of the European Commission in
Brussels and two Greek banks in Athens (primarly with smart cards--the
infrared wallets worked too but most users didn't have them).

During the course of the CAFE project some commercial electronic purse
systems emerged, notably Proton (from Banksys in Belgium, replicated
in other counties under other names) and Mondex.  These were in many
ways less sophisticated than CAFE's system (which was multi-issuer,
multi-currency, privacy-respecting, etc.) but had serious commercial
backing.  For the most part these seem to have stagnated or died.  I
suspect that getting them to catch on would require drastic measures
such as:

- differential pricing: electronic purse payments are potentially
  cheaper to process than those of debit cards because they are
  offline, but consumers find it more convenient to keep money in
  their bank account than on a smart card and will likely continue to
  do so as long as it costs no more.  (This may become less of an
  issue if/when all vending machines and parking meters are on the
  internet anyway.)

- coercion: if vending machines and parking meters accepted only
  electronic purses and not cash, this would drive their adoption.
  Something like this happened with phone cards--here in this part of
  the world it is difficult to find a pay phone that still takes coins
  (except a few at airports).  Of course phone cards too have been
  somewhat obsoleted by ubiquitous cell phones (which might also make
  good electronic wallets--I believe NTT DoCoMo is/was taking this
  approach using FeliCa, but I haven't followed how it's doing.).

Ray Hirschfeld
former Technical Director, CAFE

---------------------------------------------------------------------
The Cryptography Mailing List
Unsubscribe by sending "unsubscribe cryptography" to majordomo at metzdowd.com