Edgar Danielyan <[EMAIL PROTECTED]> writes: >> A system in which the credit card was replaced by a small, calculator >> style token with a smartcard style connector could effectively >> eliminate most of the in person and over the net fraud we experience, >> and thus get rid of large costs in the system and get rid of the need >> for every Tom, Dick and Harry to see your drivers license when you >> make a purchase. It would both improve personal privacy and help the >> economy by massively reducing transaction costs. > > Yes. And it will not happen. The cost and hassle of introducing such a > system will be so high that it wouldn't make sense financially, at > least not in the foreseeable future.
I'm think you wrong on that one. Financial cost and benefit are easily assessed on this, and I think the numbers add up. Credit card fraud costs in the hundreds of billions of dollars a year, much of which could be eliminated by a change to the sort of system I mention. That's not a small amount of money. Indeed, it is more than enough incentive for a major change. The cost of deploying such a system has also gone down very fast. Fifteen years ago, the hardware and communications costs would have been prohibitively large. I believe that this is no longer the case. So, in summary, with fraud costs extraordinarily high, and the price of a new system falling, it would not take much time to amortize the costs of a new system, after which every dollar saved is pure profit. The incentive is now in place. > The banks and other credit card issuers accept that there are some > losses they will have, they try to minimise/control them and offload > a portion of the remaining risk to cardholders, merchants and > insurance companies. "Minimization" at the moment means accepting massive losses in the system. The cost of deploying a better system would swiftly pay for itself. I suspect that the time is finally right for such a thing. Perry --------------------------------------------------------------------- The Cryptography Mailing List Unsubscribe by sending "unsubscribe cryptography" to [EMAIL PROTECTED]
