Friday , June 22, 2018

Digital Money on the Move

People on the move don’t wish to slow down to pay for gas or electric charges, tolls, parking, public transportation, or personal transportation (cabs, Uber). They also don’t want to pay fines for cutting through red lights, speeding, tailgating, and so on. Well, technology is stepping up to enable smooth, seamless payments for all types of transportation, without slowing down.

The thing with transportation is motion. You drive onto a toll road; you cross a pay bridge. There’s no time for a lengthy payment dialogue. It’s all a matter of seconds, and usually small sums. So the prevailing solution is account-based. People register with a payment authority, provide bank-account or equivalent information, and receive a payment ID. The accumulating invoice is then charged through the owner’s bank account.

This is a viable solution, but it has some serious shortcomings. First, the overhead of maintaining the system is very high. A multitude of minute charges need to be managed, databased, accounted for, and protected from compromise. Second, it doesn’t reach the unbanked population. Third, it doesn’t apply to out-of-towners, visitors, tourists, and so on. Fourth, it’s a major threat to privacy. It tells where we go, when, how fast, and how often. And, finally, the risk of abuse is disturbing. Did you really pass through this tunnel on Tuesday evening three weeks ago, as the statement says? How will you dispute this?

There is, though, an alternative solution: digitized money flowing from the transportation client to the collecting authority in real-time. When the exchange is over, the parties have no more business with each other. You walk away with no end-of-the-month invoice. Nothing to dispute. Simple.

Digitized money—or money bits—are bits that carry both value and identity, and when they are passed from payor to payee, they are no longer usable by the payor and fully usable by the payee. Say you take the express lane at rush hour, and the lane-payment station pings your wireless payment box (in your car) with its invoice (e.g., $1.75). Your car sends a bit string tethered to the invoice issuer. The bit is the money, and that is what the lane-payment center cares about—not who you are! You rush through the fast lane, and the payment is done. No records to keep, nothing to remember, nothing to examine against a later account statement.

The technology to charge electric cars while they move on the road was recently developed, and it stands to become an omnipresent reality in our urban jungle. Why? Because we can embed into this technology bit-money payment: money-bits counter flowing with the power supply to your car. Both streams are wireless and simultaneous; no invoice, no collection, no memory. Bit money works for however small charges, and however fast charges. When the charging station and the charged cars disengage, the two parties go their own way. The deal is done. No one owes money to the other.

Today, if you are tech savvy, you use your smart phone to pay your parking fees. But with bit money, you start paying the moment you park, and stop paying the moment you drive off. The bit money flows in real-time from your car to the collecting authority. You have nothing to do with it. You don’t dial anyone or enter the code of your location. You walk away from your parked car and the car negotiates the parking free. Think of how often you waste time setting up your parking session.

Entrance fees, access fees, toll gates—you readily pay with no delay. Cab service or Uber, you pay while you are driven, and you stop the payment flow when you arrive. No invoice, no collection, no dispute, no tracking.

For most of us, this will be a great relief compared to the privacy-crushing subscription models today. The few whom courts wish to follow closely may be court-ordered to use only money tethered to themselves. Such suspects will be exposed everywhere they go, since every payment they make, large or small, will be registered and serve as a road map for law enforcement.

Imagine moving around anywhere you need to go, entering any gate, any movie theater in town, and you simply don’t think about paying anything to anyone. Your car or your smart phone take care of all the services you consume, and you never get a bill. It’s closer than you think!

—Gideon Samid • Gideon@BitMint.com

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