By John Campbell
Stored value cards are a growing part of what many see as our inevitable transition to a cashless society. Love it or hate it, a cashless society could become reality before the end of this decade.
The reality of stored value cards is that they should become even easier to use than the current credit or debit card style of stored value cards available today. Most stored value cards currently utilize magnetic stripe technology to purchase items from point-of-sale terminals installed in many checkout lanes today. Some stored value cards also contain a microchip in which funds can be electronically loaded. In the future many stored value cards may become “swipeless” thanks to recent advances in radio frequency identification (RFID) technology.
RFID-based stored value cards may eventually allow “instant checkout” shopping. Within 10 years you may be able to walk into your local grocery store, fill up your cart, bag your groceries and walk out the door. Before you even bag your groceries a RF receiver in the checkout lane could instantly pick up a signal from RFID tags on all your purchases, tally the full total and debit your RFID-based stored value card in a matter of seconds. Your receipt could be printed before you even begin bagging your groceries.
Many leading retailers such as Wal-Mart are beginning to experiment with RFID tags on certain merchandise on a trial basis. If these trials are successful, the instant checkout scenario mentioned above could be reality even sooner than expected. Going even further, human beings could virtually become walking and talking stored value cards with an implanted “biochip” A biochip implanted in your wrist could contain your entire bank account balance along with identifying information and biometric information that could be needed if you ever have a medical emergency.
Even though many of these new technologies may eventually offer previously unheard of stored value card convenience there are a number of issues that need to be addressed before a truly consumer-friendly cashless society should be allowed to develop.
The first issue that will have to be addressed is fraud. Imagine this - A high tech data thief designs a device that can scan any RFID-based stored value card within a 10 foot radius. This device instantly transfers funds from stored value card accounts to an untraceable overseas bank account set up by the criminal. Without strong technological safeguards in place this kind of theft could eventually become a reality.
The second and perhaps most important issue that will have to be addressed is privacy. Who will have access to consumers’ valuable data and what will they be able to do with it? The privacy implications behind the cashless society are particularly chilling. Make a “wrong” purchase and you could end up regretting it later. Let’s say you’re writing a research paper on the ideology of Osama Bin Laden. You purchase a softcover book featuring old interviews with Bin Laden and the next day you have homeland security agents knocking on your door wanting to know why you’re interested in the terrorist mastermind. Could this happen? If the wrong people have access to consumer purchase information this could very well be an issue you may face.
Clearly worded laws will need to be established to determine who can access your data and for what purposes. Who will regulate how much of your information will be kept private? What will our privacy rights be in a cashless society? Will we be forced to trade privacy for a faster trip to the grocery store?
As part of the transition to a cashless society, stored value cards will continue to play an important role. What impact they have on our lives has yet to be determined. As consumers, we need to keep a watchful eye on developments to make sure that a real cashless society will be a consumer friendly one.
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John Campbell is the writer and editor of CashBuzz, A financial portal for the rest of us. Check out cashbuzz.com for the latest articles on money management and tips and tricks that can help improve your finances. This article may be reprinted on your Web site if the copyright, author information and active link are included.
