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Wow, cool tech - but does it pass the 'bum' test?

I'm been writing (and now video-ing and webcasting) about the non-cool side of technology for 16 years. (sorry, guys I love single dealer portals and real-time messages buses too, but they're not making it to cover of Vanity Fair any time soon).

I've never been to Comex, never been to Silicon Valley, and have never been given a cool new gadget to review (Thomson Reuters anytime you want to send over a 3000 workstation, be my guest).

At last week's Digital Money Forum talk ran to all the 'cool' things you could do with digital money. One thing that came up was the concept of digital banknotes - or smart banknotes.

Considering Australia uses and now Canada plans on printing so-called plastic banknotes, there is an innovative way to protect against counterfeiting and theft - make them disappear.

Paul Makin of Consult Hyperion said that technology could be developed to allow mobile phones to not only extract the value from a smart banknotes, but also imprint that value back to the note. The theory behind this is intriguing.

We all know the advances mobile banking is making in the developing world. By being able to programme the value of a banknote from a mobile phone, those notes could be transported as value-less blank plastic and then activated via mobile phone, on delivery.

Interesting? Yes. Practical, Hmmmm...

Paul expressed frustration with his researchers over the smart banknote idea. Why? Because the notes would take 10 to 15 years to develop. It seems that the notes - plastic with the inevitable chip - where failing the basic banknote tests.

Namely the 'crumple test'. The crumple test is where a banknote is rolled up in a tube the size of a cigarette and squished. This is to simulate stuffing money in your pocket (not anything else). The crumple test affectively crumpled the chip. An audience member called out not to forget the 'bum test' where money in a wallet, must survive sitting in the back pocket of your jeans. (Cool tech thwarted by a size 12 bum stuffed inside size 10 Levis)

To be honest with you, I am on the side of the researchers (sorry Paul). Forgetting the obvious debate on the future of physical money, 15 years is a long time in technology terms (and we're not even talking 'cool' tech). 15 years ago I didn't own a mobile phone - now it doesn't leave my side.

I am sure in 15 years some new cool technology will emerge that will solve the problems of theft, counterfeiting, and transporting money to the world's poor. When that happens do you really want to have dedicated 15 years of your life to making bank notes disappear?


Comments: (4)

Dave Kershaw
Dave Kershaw - Ulster Bank - Belfast 16 March, 2010, 08:04Be the first to give this comment the thumbs up 0 likes

I've already got smart plastic money. Some are called credit cards and others are called debit cards. They already pass the bum test and, best of all, I don't need my mobile phone to use them!

John Dring
John Dring - Intel Network Services - Swindon 16 March, 2010, 10:57Be the first to give this comment the thumbs up 0 likes

But with CC's you can't pass money from person to person.  Only from a person to a merchant with a POS device.  To do P2P that you need to be able to enter the amount and see it leave and arrive. You could do that at a PC via the web, or put a LCD on the credit card, and a pinpad, and maybe NFC or Bluetooth and you have the ability to do it face to face.  Make it an app on a mobile with radio communication and you can do it to anywhere.  If that app was an extended Facebook one, then yes FB could manage the transfer of 'credits' from friend to friend.   Some merchants might even accept payment in FB 'dollars'.  But that's another thread.

Anyway, its not high-tech because hundreds of years ago in the UK some local pubs/hotels/inns used to issue their own 'currency/tokens' which could be redeemed at other businesses in the town.  I don't believe you need to pay with 'legal tender' (in the UK at least), as long as both parties accept the transaction.  No different to accepting payment with a Scottish £5 note in England.

Dave Kershaw
Dave Kershaw - Ulster Bank - Belfast 16 March, 2010, 11:05Be the first to give this comment the thumbs up 0 likes

For person to person, why not use cash. Or indeed mobile to mobile payment.

Is there a need to transfer from mobile to a plastic token and then physically give that plastic token to another person who then moves it to their mobile in turn. Unless this is the replacement for cheques?

Dushyant Balasubramani
Dushyant Balasubramani - Infosys Consulting India Limited - Bangalore 17 March, 2010, 06:23Be the first to give this comment the thumbs up 0 likes

Do not see life in a physical object acting as a intermediary in a mobile to mobile payment scenario..throws 'convenience' out of the window. We need a utility test for this before it can be bummed or crumpled - Is there a need for a smart banknote in today's transaction scenario? 

Elizabeth Lumley

Elizabeth Lumley

Global FinTech Commentator

Girl, Disrupted

Member since

05 Nov



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