PRINT.IT
27
SECURITY PRINTING
The banknote
industry is
constantly
looking at
new ways to
keep ahead
ideas are coming from the computing
world, where experts have long
looked to quantum mechanics to
make unbreakable encryption.
At the moment, a number of
concepts such as ‘quantum money’
are being researched. The physicist
Stephen Wiesner created the
concept of quantum money around
1969. He suggested that banks
insert a hundred or so photons, the
quantum particles of light, into each
banknote. To validate the note later,
the bank would simply check one
attribute of each photon, for example
its vertical or horizontal polarization,
leaving all other attributes
unmeasured. The bank could then
verify the note’s authenticity by
checking its records. There remain
practicality and accessibility issues
to be resolved before this idea
becomes practicable, but in a world
of cyber uncertainty the concept is
attractive in as far as it exploits the
most advanced ideas in material-
based security.
The security of money in all its
different guises has become a
challenging financial control issue
for banks everywhere, as exemplified
by the two recent RBS IT failures,
which left 6.5 million RBS, Ulster
Bank and NatWest customers
unable to access their accounts.
This is not a new technology crisis
but a reoccurring one. For instance,
Estonia experienced two banking
crises related to digital technology in
1992-1994 (just after its breakaway
from the USSR) and again in 1998-
1999. Latvia, too, had a serious
financial crisis in 2008-2009. On an
almost daily basis it seems major
companies with whom citizens share
their precious financial data and
identities have been hit by external
and internal attackers. Many have
simply not had adequate basic
protection measures in place; others
have been caught short by the ever
changing inventiveness of hackers
with which they cannot keep pace.
Extract from Chapter 7:
The Death of cash
The electronic money industry
has been predicting the death of
cash for more than fifty years. The
profitable charges on all electronic
transactions that the industry makes
and the increasingly commonplace
use of credit and debit cards have
led to these predictions becoming
more intense and self-serving.
Furthermore, the development of new
electronic money products appeared
to lend weight to their arguments.
The introduction of Bitcoin gave
further impetus to the notion that
printed cash and minted coins would
soon become redundant. However,
evidence for the death of cash is
itself fatally flawed as it does not
correspond to the experience of
everyday life. In contrast to electronic
currency, cash has a very long and
successful history; it is easy to carry,
it is a very acceptable exchange
instrument and, unlike electronic
currency, does not go out ‘when
the lights go off’, as ATMs and the
electronic banking system did in the
recent Greek financial crisis.
Cash remains reliable, convenient
and safe to use. Although electronic
payments using credit and debit
cards are now widely accepted,
such transactions allow the trader,
the electronic banking medium and
potentially the state and criminals
to monitor and intervene in the
transactions of consumers.
Far from disappearing, cash
continues to circulate widely. During
the financial crisis of 2007 to 2012
cash circulation in the US grew by
a staggering 42% and, according
to bank note manufacturer Crane
Currency, the average global growth
of cash in circulation remains about
7% a year. In 2013 in the UK 50% of
consumer transactions were cash-
based.
We feel safer and more secure
holding and exchanging cash,
particularly when there is a financial
crisis or an electronic shutdown,
however brief. It is clear there are
and will be times and circumstances
when people would rather have their
money in their hand. The American
writer Mark Twain famously said
‘reports of my death have been
greatly exaggerated’. So, in our view,
has the demise of cash.
The Cambridge Security Initiative is
a think tank specialising in security
and intelligence issues supported
by several unrivalled experts in the
field. CSI integrate long-term historical
trends with analysis of future and
current patterns to develop a realistic
prediction and analysis of global
debates. CSI aims to be a platform
between the worlds of business,
government and academia, providing
accessible and powerful papers.
Contactless payment methods
offer the ease and convenience
of cash – and, according to Visa
Europe, take-up is growing fast.
In the last 12 months, three
billion contactless transactions
were made in Europe, three times
more than in the previous 12
months.
In the UK alone contactless
transactions increased from
51 million in April 2015 to 153
million in April 2016.
Contactless payments as a
proportion of all Visa-processed
face-to-face payments have
risen from 1 in 60 in 2013
to one in five today. As more
‘everyday spend’ merchants have
incorporated contactless into
their check-outs consumers have
been using contactless to pay for
lunches, lattes and much more.
Restaurants have experienced
the greatest year-on-year growth in
contactless payments (up 153%),
followed by general retail (146%),
supermarkets (119%) and food
and drink vendors (96%).
Today, more than 3.2 million
terminals are used in stores
and restaurants across Europe,
up from 2.6 million in April
2015. Most new terminals
deployed since January 2016 are
contactless-enabled.
Visa Europe is working with
banks and other partners to
ensure that by 2020 consumers
have access to at least one
contactless payment device, be
that a card, mobile or wearable.
Going
contactless
The full report
can be
downloaded
from
thecsi.org.uk
CASH IS KING
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IGITAL
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EVOLUTION
:T
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UTUREOF
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ASH
AlfredRolington
TheCambridgeSecurity Initiative
