The battle against money laundering and fraud is being fought on various fronts with various weapons, the most popular of which appears to be biometrics. But will this contactless form of payment eventually lead to a cashless society? Chris Skinner ponders the future.

As banks struggle with fraud, technologies are continually being introduced to improve security. Chip and personal identification number (PIN) debit and credit cards; radio frequency identification (RFID) tags and upgraded biometrics using fingerprinting; DNA; retinal scanning; voice spectrography; and hand geometry scanning are all assisting in the fight against fraud.

The issue for banks is the balance between secure transactions and client privacy. Banks need to manage fraudulent transactions, which cost more than $12bn a year, while the invasiveness of security mechanisms often means that they meet with opposition. For example, the European Central Bank was rumoured to be introducing RFID tagging for all euro notes from 2005, to trace money laundering operations. This immediately had privacy groups protesting, as cash is the only anonymous payments mechanism available to society and many want to keep it that way.

Embedded hope

RFID will be important for contactless payments with various cards, such as Octupus in Hong Kong, Oyster in London and PayPass from Mastercard, demonstrating success – although a recent comment from MasterCard that RFID “could be embedded in anything, even under the skin” may create concern among consumer groups.

Such concern is seen in the regular debates over the use of biometrics, which are viewed as an invasion of the person because the technologies are all based upon body parts such as eyes, face, fingers and palm. The most acceptable of them appears to be the fingerprint. According to a US Department of Justice survey, fingerprints are as acceptable to consumers for bank security usage as their signature – they are even motivated to accept such security as they become increasingly concerned about identity theft. Concerns with early fingerprinting experiments (after crimes where fingers were cut off to access someone’s bank account) have been alleviated through systems that recognise the print under the skin, ensuring that the person is alive.

The result is that biometrics will become the acceptable face of security, not just because banks introduce these technologies but because governments will use them for national security. For example, the UK government is planning to make biometric national ID cards, with fingerprint and iris recognition, compulsory by 2010.

The question this raises is that if we can pay for things with a fingerprint, why would we need cash, cheques, debit or credit cards? The more we increase contactless, secure, biometric-based payments, the more we deliver the vision of the cashless society.

Chris Skinner is founder of Shaping Tomorrow and chief executive of Balatro Ltd. Find out more at or e-mail Chris at


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