Curt Sampson (cjs@cynic.net) writes: "....Vodaphone is inserted into the
consumer -> credit card issuer [gap]...Which is good for them, if they get a
little piece of what goes by, but not good for the others, because that
money has to come from one of those three parties."
Nick May responded: "At the moment, ALL of those parties are paying a large
"fraud tax" of one sort or another. "
To which "cfb" <cfb@nirai.ne.jp> responded, in part: "The key question is:
Are carriers willing to exposure their otherwise pristine subscriber bases
to the muddy, potentially expensive waters of credit service?"
Good one. My own stinking opinion:
If carriers restrict themselves to authentication -- basically, to saying
"Yeah, we're contributing our statistical support for the assertion that
this purchase attempt -- for what and for how much? we know not -- is
actually coming from one of our customers" ... well, isn't that worth
something? And it doesn't have to come out of the pockets of the customer,
the vendor, the mobile provider, OR the credit card company, to be a
worthwhile proposition -- it just doesn't have to go INTO the pockets of a
defrauder. (Not that this won't stop parties in the chain from charging
what the market will bear.)
Nick again: "If this system could reduce fraud by even a tiny, tiny amount,
it would cut everyone's costs [...]"
cfb: "Corporations regard fraud reduction (and it's associated costs) as a
latent revenue angle... the money "saved" almost never gets passed on to the
consumer and, more often than not, the revenue recovered goes directly into
the creation of yet another business process [...] Why make money only to
"give it back to the consumer" when you can fund yet another money making
business with it?"
I.e., the savings are a good source of liquidity, which is more likely to
be put to work than to be passed back? I'd buy that, except that, in this
case, there are the fixed-capital and regulatory barriers: credit card
issuers are unlikely to get into (or for that matter, be allowed into)
mobile phone network operations. It's a "business process" that isn't very
open to them.
(Though maybe it should be faked in the interests of progress -- in some
posting way back when, I suggested Visa/Mastercard/American Express-branded
phones as a way to legitimize m-commerce. This need not mean that the CC
companies actually get their grubby paws on yet more data about us -- it
could be little more than a logo on the phone itself.)
Curt: "For physical goods, at least, it looks as if the only change is that
Vodaphone is inserted into the consumer -> credit card issuer [gap]"
Nick: "Which is a benefit for ordering through a keitai if one does not have
to enter all one's cc details."
A given, I'd say.
Nick again: "Of course, if you are physically in the shop, it has little
additional benefit EXCEPT that it might be more "fraud-proof"".
(One might further address the fraud problem with location-limited
purchasing: a phone might be able to tell what store it's in, and the mobile
provider might pass this to the CC agency, which might respond (to yet
another party): "hey, that store's not on my list of approved accounts for
this customer. Ring an alarm somewhere ...")
cfb [listing other benefits]: "A consolidated bill? The opportunity to use
a biometric to verify?"
I'd say both of these are biggies, although a consolidated bill takes the
provider beyond mere authentication services.
Voice-print has been criticized as a biometric, since one could pipe
someone else's voice into the mic, but ... isn't this a funny thing to be
doing at a store counter? And the store itself could be taking the same
voice-print independently and sending it to the provider for authentication.
The mobile provider's contribution: "Yes, this person, through both a mobile
phone mic and an in-store mic, actually moved his lips and in one utterance
produced two voice samples that match each other, both for voice
characteristics and acoustic environment, voice fingerprints of which match
that of the mobile's owner ... good enough for us." Or not. Overkill, if
anything.
cfb [listing another advantage]: "The opportunity to establish an
uber-identity by knowing not only who they communicate with, but what they
buy (ask any profiler what an ego is made of... possessions and
interpersonal communication are going to be in the top 10, maybe even the
top 5)... today's business game is not only about knowing *who* you are, but
*what* you are."
And with location technologies, add "where you are", since we all shift
our identities subtly according to location. But see below.
cfb: "...At the moment, phone companies can buy credit information (at
unaffordable rates), but credit companies can't buy phone records ... the
merger of these two information resources is an obvious eventuality."
Hmm ... under what regulatory regime? This is one of the reasons why
inserting the mobile provider ONLY as an authenticator seems more plausible
to me: concerns over privacy and separation of powers might make more
extensive data sharing a non-starter in many countries. Just
socio-technologically, I'd say authentication-only wins: the thinner the
service layer, and the more you limited the kind of data it handles, the
more likely it is you'll get a de facto standard out of it and a de jure
standard in the end. (The old "networks should be dumb" imperative.)
[snip]
cfb: "I'd say that useful life span of non-augmented mag cards is coming to
an end. What's going to replace it? Smart cards? Or... The keitai? The
choice seems fairly obvious to me; however, if a simple debit service [like
7-11's defunct system], hosted by one of the world's largest chain of
convenience stores, can not survive, what does that say for the future of
debit/credit services on mobile phone networks...?"
The problem is: what is perceived as money? Sounds like the 7-11 debit
cards failed a basic test: Can you use it for almost anything you choose?
If you can't, it's not like money, and will face stiff resistance from
consumers. Smart cards have a leg up, since the plastic-is-money perception
is already in place. Any mobile-phone substitute will need to exhibit
fairly dramatic advantages over credit cards to overcome the perception
obstacle and gain rapid acceptance. Which is why I like the idea of
VisaPhone, MasterPhone, AmExPhone ... fake it 'til you make it.
-michael turner
leap@gol.com
Received on Mon Jan 14 06:43:05 2002