Thursday , June 20, 2024

Security Notes: No Sweat, My Robot Will Pay

No Sweat, My Robot Will Pay

Gideon Samid •

The decision to purchase and pay is quintessentially human, or so we believe today. Computers account for decision-support data, convenient payment-handling devices, and automated accounting. But the pivotal determination to actually make a payment remains in the unchallenged human domain, doesn’t it?

Not exactly, as it turns out. If smart phones, big data, and the 24/7 surveillance society are not enough high tech for you, consider AI, or Artificial Intelligence. After being humiliated in the closing of the 20th century when its hype did not pan out, the technology that breathes life into robots and enlivens avatars is coming back with a roar.

Observing how a child learns to navigate in our world, AI pioneers encoded new algorithms and creative data representations, refocusing on Alan Turing’s question whether a machine could carry on a conversation with a human being in such a way that the human would not be able to tell whether she were talking to a person or to a machine. No wonder Stephen Hawking opined: “Success in creating AI would be the biggest event in human history.”

One aspect of this newly programmable capability is “payment thinking.” Indeed, the decision to make a payment is formed on the basis of relatively few factors. The interrelationships between these factors (like price comparison, affordability, need, future price changes, etc.) can be reduced to algorithmic expression, even for instances that are emotionally charged (we have learned to quantify and gauge a set of inconsistent human emotions).

So it is only a matter of time before your avatar learns your desires, your preferences, your aversions, and can make a payment reflecting what you yourself would have done.

This AI capability is now fast intersecting with the technology of digital money. Today’s payment regimen is based on mutual verification of identities between payor and payee. Nancy’s robot is not Nancy, after all, so how would it pay for charging its batteries? But Nancy could put her robot in possession of, say, $100, in digital-money format, so her robot can pay $17.75 for a cleaning. The service provider would only need to validate the transaction, without caring who owns the robot. Admittedly, hacking is possible in both cases. But with digital cash the theft is limited to $100, while in an identity-based payment the theft is open-ended.

Today, hackers sneak malware into your computer and use the machine’s computing power to process data on their behalf. Tomorrow, when you go to sleep, you will set your computer on, say, “service,” charging a fee paid as-you-go for its computations—all cash payments. Old Napster—killed by the Supreme Court—will come back to life, using peer-to-peer distribution accompanied by robo-payment per each download, divided between the downloading peer and the digital-rights owner.

Or consider the potential for investing. The questions asked of you by an investment consultant, and the logic she applies to decide on your investment strategy, are easily expressed with great fidelity via AI algorithms, allowing your avatar to pounce on a stock-purchase opportunity that emerged while you slept, paying with digital money. Unlike human beings, who get very emotional (and stupid) in fast-developing investment sessions, the avatar sticks to its principles and remains cool.

Advanced refrigerators can already figure out that you are running out of eggs. The next generation of appliances will contact the nearby grocery store, negotiate a price, and order—and pay—for two dozen eggs to be delivered the next day. Your smart phone will not require you to subscribe to an Internet service provider. The phone will “hail” for service when needed, and pay on the spot (anonymously, if so desired) for exactly the data delivered.

Non-urgent commodities will be specified by you for purchase, but your smart phone, loaded with digital cash, will keep scanning the various vendors of these commodities, haggle with the AI agent of the various sellers, wait for a sale (since the commodities are not needed urgently), and eventually lock in the best deal.

This is only the beginning. The intersection of AI and digital money absolutely explodes with opportunities, efficiencies, and convenience of unprecedented dimensions. Entrepreneurs all over the world are gearing up for this fast-approaching future. I just hope that we here in America don’t miss out by getting bogged down debating aging technology like EMV.

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