Categories: News

Time Out With YEMI KUSH: The End Of Cash Vs Identity Management

Cash is the vinyl of payments but predictions about the coming End of Cash
have been around for years, growing louder since the arrival of contactless
payment.
While this may sound like a paranoid doomsday scenario to some, as a
real world finance professional, I believe that this scenario is not only
eminently possible, but most of the technology is already available to make it
reality.

Yemi Kush

Technological advances have led to the creation of algorithms that can
instantaneously review financial transactions, determining the nature, location
and even the appropriateness of a purchase decision. Cardholders already
encounter this technology when they receive fraud alerts after a transaction
that looks out of kilter with the particular consumer’s normal purchasing
patterns.
The technologies can thus serve to protect consumers. That said, they
have already been used to control consumer behavior. It is not too far-fetched
to wonder if the day might come when the health records of an overweight
individual would lead to a situation in which they find that any sugary drink
purchase they make through a credit or debit card is declined. Sounds
far-fetched but maybe not so.

You might think then that the person can always pay cash and remain outside
the purview of these technologies. This may be the case for the moment, but we
are well on the road to becoming a cashless society. Monetary policy could also
be much more efficiently executed without currency circulating, since it would
then be easy to implement negative interest-rate policies. But there is also a
sinister risk to a cashless society. To no one’s surprise, identity theft and asso­ciated fraud losses rose
again in 2012. The number of victims climbed to more than 12 million last year,
an 11 percent increase over 2011, according to the recently released Javelin
2013 Identity Fraud Report. Losses amounted to almost $21 billion.

Graph 1: 2005-2012 Identity theft
victims and fraud amounts from Javelin Strategy & Research

A quick distinction between
identity theft and identity fraud: identity theft is when an unauthorized
person obtains personal infor­mation about an individual, and identity fraud
occurs when someone uses that personal information, without the individual’s
consent, to con­duct financial transactions. Two types of identity theft drove
the overall increase, the new-account
identity
and account takeover fraud.

Tireni Adebayo

Tireni Adebayo is the Editor of Kemi Filani News. She has BSC in Mass Communication from the Redeemer's University and M.A in Mass Communication from the University of Lagos (2014 - 2015) where she majored in Public Relations and Advertising and Digital Media.  When she is not writing, she is either listening to music or reading her favorite books. Tel: +2348000000901 Address: Herbert Macaulay, Yaba, Lagos, Nigeria Email: tireni.adabayo@kemifilani.ng

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