Are We Moving to a Paperless Society?
Only about 25 percent of point-of-sale purchases today are made with cash, and experts expect that number to slowly decline in coming years.
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Starting in 2012, the U.S. Treasury Department issued only electronic bonds, and the Social Security Administration went paperless in 2010. If retirees born decades before the advent of home computing can accept electronic money, could cash soon be a thing of the past?
Only about 25 percent of point-of-sale purchases today are made with cash, and experts expect that number to slowly decline in coming years. In 2011, 27 percent of all point-of-sale purchases were made with cash, and that number will drop to 23 percent by 2017, according to market research company Javelin Strategy & Research. As more and more people pay with credit or debit cards, a few retailers are beginning to turn away from cash. Airlines, for instance, will only take plastic for snacks and other in-flight amenities.
The technology that may hasten the transition to a cashless society is near field communication (NFC). NFC can send data from one device (such as a cell phone) to another (such as a different phone or an NFC-enabled cash register.) A smartphone with NFC technology could replace every card in a person’s wallet – not only his credit and debit cards, but also reward cards and even library cards.
The range of transmission is short – about 8 inches – which is a good thing for security. However, a host of issues still remain. These are some experts are watching:
When a criminal “listens in” on a digital transaction, it’s called eavesdropping. The range limitations of NFC help alleviate this risk, but retailers can also use secure channels and encrypt the information as it’s sent to protect the information even if intercepted.
Data Corruption and Manipulation
As with eavesdropping, criminals could interfere with information as it’s transmitted from the mobile device to the cash register. Using secure channels and encryption can help prevent this. Some devices are programmed to watch for data corruption attacks and prevent them.
In interception attacks, a person acts as a middleman between two NFC devices and receives and alters the information as it passes between them. To prevent this type of attack, devices should be in an active-passive pairing. This means one device receives info and the other sends it, instead of both devices receiving and passing information.
It’s a low-tech risk, but just as big a threat as a cyber attack. If a thief gets his hands on an NFC-enabled smartphone, the result could range from inconvenience to financial loss. To avoid this, smartphone owners should install a password or other type of lock on the phone.
While going cashless presents new risks, experts say it’s simply a trade-off for old risks.
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