note that the industry has somewhat addressed that with the stored value cards (that you find at video stores, coffee houses, department stores, book stores, grocery stores, drug stores, etc). The same POS terminals now process debit cards, credit cards, and stored value cards .... effectively all going to the same backend merchant processor .... and the backend merchant processor routing the transaction as appropriate.
as previously noted .... to some extent europe went with stored-value chip cards doing offline transactions because of the telco infrastructure barrier in the 80s & 90s (availability and costs). there wasn't a similar telco barrier in the US .... and effectively the same stored-value facility was provided by online transactions thru the existing POS infrastructure. at 100,000 feet, the credit, debit and stored-value transaction processing is nearly the same .... modulo various regulatory issues. and of course ... x9.59 was designed to provided authenticated, secure transactions .... regardless of the kind of transactions. x9.59 ref: http://www.garlic.com/~lynn/index.html#x959 misc. past stored-value refs: http://www.garlic.com/~lynn/aadsmore.htm#eleccash re:The Law of Digital Cash http://www.garlic.com/~lynn/aadsm2.htm#straw AADS Strawman http://www.garlic.com/~lynn/aadsm6.htm#digcash IP: Re: Why we don't use digital cash http://www.garlic.com/~lynn/aadsm6.htm#terror12 [FYI] Did Encryption Empower These Terrorists? http://www.garlic.com/~lynn/aadsm6.htm#pcards2 The end of P-Cards? (addenda) http://www.garlic.com/~lynn/aadsm7.htm#pcards4 FW: The end of P-Cards? http://www.garlic.com/~lynn/aadsm7.htm#idcard2 AGAINST ID CARDS http://www.garlic.com/~lynn/aadsm9.htm#cfppki12 CFP: PKI research workshop http://www.garlic.com/~lynn/aadsm9.htm#smallpay Small/Secure Payment Business Models http://www.garlic.com/~lynn/aadsm11.htm#29 Proposal: A replacement for 3D Secure http://www.garlic.com/~lynn/aadsm12.htm#31 The Bank-model Was: Employee Certificates - Security Issues http://www.garlic.com/~lynn/aadsm12.htm#51 Frist Data Unit Says It's Untangling Authentication http://www.garlic.com/~lynn/aepay10.htm#10 InfoSpace Buys ECash Technologies http://www.garlic.com/~lynn/aepay10.htm#65 eBay Customers Targetted by Credit Card Scam http://www.garlic.com/~lynn/2001m.html#4 Smart Card vs. Magnetic Strip Market http://www.garlic.com/~lynn/2002c.html#22 Opinion on smartcard security requested http://www.garlic.com/~lynn/2002c.html#23 Opinion on smartcard security requested http://www.garlic.com/~lynn/2002c.html#24 Opinion on smartcard security requested http://www.garlic.com/~lynn/2002c.html#36 economic trade off in a pure reader system http://www.garlic.com/~lynn/2002d.html#41 Why? http://www.garlic.com/~lynn/2002e.html#14 EMV cards http://www.garlic.com/~lynn/2002e.html#18 Opinion on smartcard security requested http://www.garlic.com/~lynn/2002e.html#22 Opinion on smartcard security requested http://www.garlic.com/~lynn/2002e.html#23 Opinion on smartcard security requested http://www.garlic.com/~lynn/2002f.html#34 Security and e-commerce http://www.garlic.com/~lynn/2002f.html#35 Security and e-commerce http://www.garlic.com/~lynn/2002f.html#40 e-commerce future http://www.garlic.com/~lynn/2002g.html#69 Digital signature http://www.garlic.com/~lynn/2002m.html#17 A new e-commerce security proposal http://www.garlic.com/~lynn/2002m.html#19 A new e-commerce security proposal http://www.garlic.com/~lynn/2002m.html#55 Beware, Intel to embed digital certificates in Banias http://www.garlic.com/~lynn/2002n.html#14 So how does it work... (public/private key) -- Internet trivia, 20th anv: http://www.garlic.com/~lynn/rfcietff.htm [EMAIL PROTECTED] on 2/23/2003 7:29 am wrote: Unfortunately, those nice things that banks have come with a significant cost infrastructure. It is that infrastructure that makes micropayments cost prohibitive. For example, suppose someone decided to compile a CD of the tunes he likes. He downloads several hundred songs. He would have to pay for each song (post Napster) and each song would generate a transaction. Consider what would be required to post each micropoayment (think of lines of print on a checking account statement -- required, the additional number of pages, additional postage, additional disk space to support online lookups, etc.). Then consider that the bank has to have the infrastructure to support investigations of each of the charges. The cost adds up quickly. The solutions we had worked on always involved aggregating transactions to minimize the number of transactions posted to a bank account. A nonbank company has the legal ability to do this, a bank does not. Alan
