Increasingly we are becoming a cashless society, with so many ways to transfer funds at our finger tips.   Online banking, paypal, credit cards, EFTPOS, e-toll cards and debit cards are now so entrenched in our daily lives that we almost  have no need to carry real money at all.

The mobile phone has always been seen as a potential cash replacement device that could act as our digital wallet.   Phones are linked to  billing systems either pre or post paid and have been able to make small value transactions efficient.   However there is a catch.   In all cases the carrier takes a hefty fee from the transaction for the credit risk.  This can be as high as 60% in some cases.

Add to this the issue of authentication of the identity of the user and you can see why credit risk may be high.  So how do we solve this problem of providing a safe stored value device that can only be activated by a given identity.

There have been many attempts to add more technology to this puzzle from a card reader attached to handsets, a second SIM card etc.  Most failed the user test of simplicity and cost.

Bio-metrics may be the solution, whether it be a finger print or iris scan there is no disputing the uniqueness of these factors in most cases.   However in order for this to work we need to give up some more information about ourselves to our bank, credit provider or telco.  The fingerprint and/or iris scan would have to be stored to be available to be matched at the time of any transaction by all parties involved.  No match no transfer.

This brings up a range of privacy and legal issues, but if you factor in to this the cost to banks, telcos and credit card providers of fraudulent transactions in any given year, it makes sense for them to issue each of us with a simple authentication device.