This forwarded artlicle will be of interest to anyone interested in the
corporate take over of everyday life, and the insidious way that the
corporate agenda is being introduced to attain public acceptance.

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>Date: Fri, 18 Apr 1997 10:54:32 -0700
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>From: [log in to unmask] (by way of [log in to unmask])
>Subject: Fwd: Mondex information..privacy issues
>
>From: Richard Procter <[log in to unmask]>
>
>> _______________________________________________________
>> This report is easier to read at
>> http://www.lglobal.com/~pj/no_mondex/index.html
>> (where it is also linked up to supporting documents).
>> _______________________________________________________
>>
>> The Mondex Trail...
>> A Preliminary Report
>>
>>       -=pj lilley=-
>>
>> BACKGROUND
>>
>>  In November of 1995, Mondex, a British company,
>> announced it would pilot it's North American launch of it's new
>> 'smart card' system of electronic "cash" in Guelph, Ontario.
>>
>>  Mondex calls itself a "smartcard which brings together
>> the advantages of paying by cash with the convenience of
>> paying by card."    But cash, even other forms of e-cash, can be used
>> anonymously, and Mondex cannot.    Like other smart card systems,
>> there is a chip embedded in the Mondex card with a tiny microprocessor
>> and memory to store electronic information.   But unlike some systems,
>> Mondex is tied to your identity, because that information is an
>> individual's 16-digit Personal Identification Number, current stored
>> value, information on recent transactions, plus a 4-digit PIN number
>> to 'lock' the card.  This digital information can be transferred over
>> the phone lines, through an ATM, over the Internet or soon, Mondex
>> hopes, directly at the point-of-sale.
>>
>>  The corporation also claims that "Mondex is unique in
>> that its technology platform allows for person-to-person
>> transfer of electronic cash that is not reported to a central
>> computer system."  In fact, although trading is not (as yet)
>> reported to a single "central computer system", it has become
>> clear that there is an audit trail.   Further, Mondex is certainly not
>> unique in the rapidly exploding world of digital commerce, where,
>> compared to competitors, it is one of the systems that is least
>> respective of individual privacy.
>>
>>  Mondex first began it's quest for a "single global
>> standard for chip-based payment products" with a pilot project
>> in Swindon, England.  Last year, Mondex's Swindon manager
>> admitted in Network  Week, a trade publication, that "we can
>> certainly trace where cards have been used."  It is now using
>> Guelph, Ontario, Canada as it's primary North American pilot
>> project, with similar pilots beginning in San Franciso, Hong
>> Kong and New Zealand.
>>
>> HOW STUPID IS THIS SMART CARD?
>>
>>  Mondex says it's card is "just like cash" and "ensures
>> privacy."   Yet, last June, Privacy International, a consumer
>> protection group, got the United Kingdom's Fair Trading Office
>> to take Mondex to task for falsely advertising it's product as
>> anonymous.     The 16 digit Personal Identification (PID)
>> Number on the card encodes your name, the name of the issuing
>> institution, and your assigned bank account/Mondex number.
>> This unique serial number identifier is used to establish
>> "security" of transactions at the point-of-sale.  Your card
>> reader keeps visible track of at least the last 10 transactions.  The
>> merchants card keeps track of the last 300 transactions.   Privacy
>> International proved that this recorded audit trail was available to
>> the issuing institution, and potentially to third- party direct
>> marketers.   Mondex is much closer to a credit card or a regular bank
>> debit card than cash..
>>
>>  If you don't have a bank account, you can't get a Mondex
>> card.   Alias' cannot be used, because the system is set up to
>> prevent anonymity.    Mondex claims it does not discriminate
>> against the poor or children, because they can get bank
>> accounts like anyone else.  But this ignores the recurring
>> problem of bank discrimination.
>>
>>  Mondex is betting that people will want to sell their
>> privacy for the "consumer benefits" of convenience and
>> security.    First of all, the advantage of saving time and the
>> hassle of transporting cash could be accomplished with a truly
>> anonymous e-cash system.   Yet, anonymous e-cash raises
>> many implications around tax evasion and money laundering.
>> How would traditional governments survive in a system which
>> allowed the unmonitored global transfer of money and
>> information?    Further, how are they surviving now, since the
>> major corporations which already control this information
>> transfer operate beyond national boundaries?
>>
>>  The issue of security compromises of forging and/or
>> hacking smart cards is also in hot debate right now.   Mondex
>> has not released technical details, but claims that its system
>> of encryption and constantly changing security codes will
>> withstand any attempts to re-engineer the chip.   [These issues
>> will be covered in more depth on the web site:
>> http://www.lglobal.com/~pj/no_mondex/]
>>
>>  So, considering the problems of the Mondex system,
>> what are the benefits to the banks that outweigh the public
>> interest?   First, there is a considerable savings in avoiding
>> transporting, storing, and dispensing cash.   When Guelph city
>> councillor Karen Farbridge asked if this savings would be
>> returned to the customer, she was told, with a smile, that "it's a
>> competitive world."   Initially, the banks involved in implementing
>> various smart card projects (including Mondex) do not charge the
>> customer for the card, but plan to do so in the future.    The highly
>> increased velocity of transactions is also profitable.    This
>> turnover speed also means more service charges with less staff.  And
>> remember that an individual does not collect interest from the cash
>> sitting on one's card.    Of course, the key advantage of a system
>> like Mondex, as opposed to a genuinely anonymous system, is the
>> 'customer' identity is inextricably tied to the card.    This confers
>> the ability to easily track demographics and negates extensive market
>> surveys.  Personal information becomes a currency.
>>
>> TARGET MARKET: GUELPH
>>
>>  In Canada, Mondex partnered with the Royal Bank, CIBC,
>> and Bell, and has begun to unleash their significant public
>> relations machine on our city of Guelph.   The technology, just
>> beginning implementation here, is still the same as that tried
>> in Swindon, England, only the advertising has changed, so that
>> the word "anonymous" is no longer used.
>>
>>  In July of this year, Mondex convinced un-informed
>> Guelph City Councillors that it's system would be a benefit to
>> our city.  All except one councillor voted enthusiastically in
>> favour of the project, and directed the city's Chief
>> Administrative Officer, David Creech, to spend a significant
>> amount of his time helping Mondex -- all without any external
>> research beyond the corporate consultants representing
>> Mondex, Royal Bank and CIBC.   Ginty Jocius, a local PR firm
>> which is also one of the largest Tory contributors in town,
>> hired Mary Cocivera, former head of University
>> Communications, to work on the Mondex launch.   This firm will
>> be helping to organize events and deal with media.   Wisely,
>> Mondex chose to go first to Internet Service Providers and
>> local web designers who would clearly stand to make a tidy
>> profit from the construction of an on-line shopping mall,
>> offering them a free card and reader to play with, back in
>> March of this year.   Mondex and it's partners have held a series of
>> evening receptions  for local business-people and 'dignitaries' to
>> preview the system, and to familarize them with its use. They now have
>> 500 local businesses signed up to go, and 30 of these downtown stores
>> are already using the card.
>>
>>  The storefront downtown office is not yet open to the
>> public, and Mondex does not want to have a public meeting on
>> the technology and its use until they are ready for their grand
>> roll-out in January. The company has divided it's PR efforts
>> between a "Merchant Group" and a "Consumer Group" to better
>> cover the bases.  One of the latter group, Ann Bilanski, is the
>> daughter of city councillor Walter Bilanski, a firm proponent
>> of Mondex.    Ann Bilanski was also a student governor at the
>> University of Guelph, and has used her connections to student
>> organizations and media to gather support, despite the student
>> union's expressed concerns, for launching Mondex on campus.
>> University of Guelph administration has also come out firmly
>> in support of Mondex, and also without external research on the
>> possible longer-term implications of this technology.  Mondex
>> even offered to pay for the 1996 Community Barbeque, but was
>> refused by the Central Student's Association.
>>
>> GUELPH IN THE BIGGER PICTURE
>>
>>  MasterCard International is currently in the process of
>> purchasing controlling stock (51%) of Mondex International.
>> MasterCard seems to be shifting it's Electronic Commerce
>> division from it's "MasterCash" program to implementing
>> Mondex, eventually worldwide.
>>
>>  Bell Canada will be installing at least 1,000 new
>> Mondex-compatible telephones in Guelph, beginning in the new
>> year.   Bell will also be adapting home and business phones to
>> the Mondex system so that cash can be transferred from your
>> bank account to your card, or person-to-person transactions
>> can be made.  Since banks are one of the primary consumers of
>> telecommunications already, it is certainly in the interest of
>> the major telephone carriers to pursue the Mondex/Mastercard
>> system for a full roll-out in North America.
>>
>>  A company called VeriFone is creating an adaptable
>> point-of-sale payment system that incorporates biometric
>> identification (digital fingerprinting) and credit card-type
>> transaction.  The company that made this particular "swipe and
>> press" fingerscanning system is called Identix, and it has an
>> agreement with VeriFone to develop the system for use in
>> electronic commerce.  Identix is currently the only company
>> with FBI approval for fingerprint technology.   VeriFone has
>> agreements with Mondex and MasterCard to design the
>> applications and point-of-sale technology for use over the
>> phone.  VeriFone is working with Oracle in database
>> development; Oracle is a company whose databases contain
>> more than half the world's known information.  VeriFone also
>> has an agreement with Microsoft for Internet e-commerce
>> development, including biometric identification, and corporate
>> intranet systems.   It is the goal of all of these corporations to
>> seamlessly integrate  databases, biometric information on individuals
>> and finance, and international telecommunications.   The competition
>> for global standards is so concentrated that the system has an
>> inevitable tendency to centralize.
>>
>>  Closer to home, the Royal Bank is also the primary bank
>> involved in fingerscanning Toronto welfare recipients.    The
>> law passed in June, and as of September '96, recipients have
>> been 'strongly encouraged' to register their fingerscan.  It
>> won't be a mandatory system until it is implemented in
>> surrounding counties, but the current length of red tape
>> ensures it is extremely difficult to avoid registering.  In it's
>> shareholder's report, the Royal Bank describes a near future where all
>> of it's customers have the "security" of biometric- authenticated
>> transactions.
>>
>>  In the Metro Toronto Social Services 'Client
>> Identification and Benefits System (CIBS) proprosal, they
>> allude to some of the "benefits" that welfare recipients could
>> expect:  cards that work in certain stores, or only for certain
>> products, a system that consolidates databases of personal
>> information, and a system that assumes you are trying to
>> commit fraud, before it assumes you are trying to survive.
>> Metro council wanted to get the jump on the Provincial
>> government in this matter, since the Harris government is
>> assessing the development of an identification card to cover a
>> range of programs, but Harris would have to contend with a
>> larger-scale public inquiry into the implications.
>>
>>  Metro council also requested that the Federal Government
>> investigate the use of biometric technology for national
>> identification purposes.   Similar to the way that Mondex was
>> passed in Guelph, almost all of the 'research' presented to city
>> councillors in order to make the CIBS decision was supplied through
>> corporate propaganda.   When presented with a petition a couple of
>> years ago to promise not to implement fingerprinting, all 6
>> politicians in the Toronto Mayoral race signed the pledge.
>>
>>  It seems that when the public isn't looking,
>> infringements on privacy and freedom creep in.   William
>> Melton, founder of both CyberCash, Inc. and VeriFone thinks
>> that financial institutions can handle public inquiry through
>> more aggressive public relations.  "By 2000, the privacy issue
>> will have really hit," Mr. Melton predicted to a group of
>> bankers.  He said the negative consequences of such an
>> explosive political issue could be mitigated by banks'
>> convincing the public they have addressed it. But he warned of
>> "a huge public debate."  Given the availability of data
>> encryption techniques and specifications like SET (Secure
>> Electronic Transactions protocol), which is being developed by
>> MasterCard and Visa, he said: "Tell your customers, 'Don't
>> worry. We'll take care of it'."   And that seems to be exactly
>> the route that the major Canadian banks have decided to take...
>> using vaguely moralistic rhetoric to emphasize "personal
>> banking".  For example, the multi-million dollar mbanx
>> campaign assures customers that the "times are 'a changin'"
>> and uses the face of a small indigenous girl to convince you
>> that they "keep their promises".    From the Bank of Montreal's
>> mbanx, which uses Netscape, to the Royal Bank's open
>> encouragement of biometric identification, vast profits are
>> being made from a system that depersonalizes and
>> criminalizes individuals, and uses the corporate media to try
>> to convince you that the little people matter.
>>
>> WHERE IT'S AT
>>
>>  In the long run, we are moving away from valuing
>> individual citizen's privacy by dropping anonymity and
>> accepting the banker's language of "authentication" and "client
>> services".   In this language, you don't have inherent rights as a
>> human being, but you can buy privacy if you can afford it.
>>
>>  It is not only the Orwellian fear of tracking the
>> movements of dissenters, but the day to day discrimination
>> and criminalization of the poor.  It is the resentment of
>> working people that global capital has become completely
>> fluid, moving at light speed around the globe, independent of
>> government or citizen control, while labour is becoming more
>> and more rigidly trapped.    Don Tapscott, Canada's guru of the
>> new digital information economy, speaks glowingly about the
>> elimination of the "middle men."   What Guelph's small
>> businesses miss in their initial excitement over Mondex is that
>> they too are under attack, as large manufacturer/wholesalers
>> will now sell direct to the individual.  WalMart is partnering
>> with Microsoft to launch just such a program.   Labour is
>> becoming polarized into large-scale homogenous mass
>> production or into low-end, minimum wage, non-union, local
>> franchise operations.   Such a centralized system is much
>> easier for the information marketers to exploit and
>> manipulate.
>>
>>  Our society is undergoing rapid social and technological
>> upheaval as electronic media is transforming our daily
>> existence.  Electronic commerce is a central part of this
>> transformation.   If we, as citizens, do not even get a chance to make
>> an informed decision about the implementation and use of electronic
>> commerce, then it is left to purely business interests to set the
>> creation and control of this system, and at our great expense.
>>
>>  In the case of Mondex in Guelph, the marketplace is
>> clearly driving the research, development and implementation
>> of this technology, not the public interest.
>>
>>  Perhaps it's time to throw up the barricades on the
>> information superhighway..
>>
>> _____________________________________________________________
>> pj lilley is an independent activist and researcher trying to
>> survive in Guelph.  She can be contacted at [log in to unmask],
>> and she doesn't usually talk about herself in the third person.
>>
>> If you are concerned about privacy and freedom, don't forget
>> to check out the website for this article at
>>    http://www.lglobal.com/~pj/no_mondex/
>>
>> If you can help spread the word about human rights
>> infringements by banks and corporate governance, or if you
>> have information or financial support to offer this campaign,
>> please contact pj at Tao Communications <[log in to unmask]>
>>
>> _______________________________________________________________
>> Much thanks to Privacy International's Simon Davies; Felix
>> Stalder; David Jones of Electronic Frontier Canada; Jesse
>> Hirsh (and all the E-Commerce discussion participants) of The
>> McLuhan Program in Culture and Technology ... for all their
>> help with research and context.
>> _______________________________________________________________
>
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>
>
David Burman            [log in to unmask]
LETS Toronto            phone: 416-978-0536
                        fax:   416-878-8511