Smart Banking Guide

July 13, 2008

Completely Anonymous Electronic Payments?

Normally, when I go shopping and I use my bank cards, then several days later, my mail box will be filled with different kinds of flyers which may directly or indirectly related to the shops where I visited previously. So it is hard to avoid personal info exposure risk while using my bank cards. Can we really make completely Anonymous Electronic Payments?

Anonymity means that the identity of the buyer is not explicitly used to settle the obligations. Personalization, in contrast, establishes a direct or indirect relationship between the debtor and the means of payment. Cash in the form of notes and metallic coins is anonymous because it has no links to the nominal identity of holders and their banking references. The case of remote financial transactions raises two issues: the ability to communicate anonymously and the ability to make anonymous payments. Clearly, an anonymous communication is a necessary condition for anonymous payments because, once the source of a call has been identified, the most sophisticated strategies for masking the exchanges would not be able to hide the identity of the caller.

Smart Banking Guide

For bank cards and electronic or virtual purses and holders, there are four types of anonymity:

The plastic support is anonymous if it does not contain any identifier that can establish a link with the holder. This is the case with telephone cards.

In contrast, a bank card is not anonymous because it carries the card number as well as the cardholder’s name and account.

Anonymity for face-to-face transactions is different from anonymity for remote transactions. In face-to-face commerce, the use of a smart card with off-line verification can protect the identify of the holder and the subject of the transaction. This protection is achieved because the algorithms for authentication and identification, which are stored within the memory of the card, will operate independently of any management center. The case of remote commercial transactions is different because their smooth operation requires that both parties identify themselves without ambiguity to prevent any future contest of the authenticity of the exchange. In this case, complete anonymity is incompatible with nonrepudiation. In terms of anonymity, the most that can be achieved is partial anonymity; for example, merchants would not have access to the references of the holder and this information would be collected and stored by a trusted third party that would be an arbiter if a dispute arises.

1 Comment »

  1. All great reason to use discretion and be wary of card usages.

    Comment by Financial — August 28, 2008 @ 6:34 pm


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