h a l f b a k e r yPoof of concept
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Before you scream about transaction fees, bear in mind that there is usually no fee for writing a check (unless your checking account stinks). Anyhow, the basic idea is for banks to create special debit cards with a maximum account balance of $20. The card would be anonymous (and thus would be largely
equivalent to cash and just as valuable if stolen). It would not be useable online. When buying items with cash, you would use the card to pay the change. So, paying a $1.85 purchase would mean either paying $1 and having the card pay $0.85 or paying $2 and having the card take the $0.15 change. The card could also be used to pay for very small purchases (e.g. it could be swiped in copy machines and whatnot).
Basically, the point of this card is to negate the need for change. I suppose the next question is why anyone would want to provide these. I think a fee of $0.02 per year subtracted from such accounts would work, along with a fee of $0.02 to activate a card. An empty card would deactivate but could be reactivated for $0.02. A card could be reactivated using a vending-machine type interface ($0.02 is an ideal fee) , or a new card could be purchased from such a machine (e.g. spending $5 to purchase such a card would yield a card starting with $4.98). A card could also be reactivated by putting money on it by purchasing something and having the change go into the card.
In fact, let's change it a bit. Make a new card cost $0.10 instead of $0.02. Users can get $0.10 in return for empty cards. A bum might conceivably collect lots of cards. Throwing 11 empty cards into a kiosk (similar to those used for can recycling) would yield 1 card containing $1.00. I do admit that there is not really much motivation for giving up an empty card, unless the magnetic strip is dying.
Differences from a regular debit card:
1. Card is not associated with a person. You could conceivably give such a card to a stranger or throw it in a charity container with no fear of abuse.
2. The card would have a maximum balance of $20.
3. The card would not expire, but would deactivate if it ran out of money.
4. The card would be of the thinner, cheaper variety of cards (like the kind used for subway passes).
Temporary Credit Cards
Temporary_20credit_20cards
Essentially the same idea. [bungston, Sep 23 2005]
Visa gift card
http://www.visadps.com/prod-giftcard.html
Personalized or non-personalized, reloadable or disposable... [half, Sep 26 2005]
Oyster card
http://www.tfl.gov..../oyster/general.asp
[kinemojo, Sep 26 2005]
Quick
http://216.239.37.1...en%26lr%3D%26sa%3DG
Baked in Austria [kinemojo, Sep 26 2005]
(?) arrowheadphx
http://arrowheadphx...0CARD/P520I0M20UID0
Credit card machine [coke, Mar 03 2008]
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Annotation:
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This sounds like a lot of work for just aminimal gain in convenience but once up and running it would probably work. Most of the infrastructure already exists in the form of credit and debit card readers. |
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Still, one must ask, what do we put on the train tracks after spare change is eliminated? |
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I had this idea a while back (linked). Apparently it is also baked. I still have never seen the baked version for sale. |
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Fraud is the problem. If the card is not linked to a central database with a unique identifying code (as credit cards are) then the potential exists for nasty people to crack the card and reproduce thousands of bogus $20 cards thus ripping loads of innocent shop keepers off. Credit cards have a higher potential for larger rip offs but they can be individually shut off on a case by case basis if need be unlike generic cash cards as proposed. |
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New cell phone chips now allow you to pass your phone near a vending machine and have the cost charged to your phone bill... gotta love that. |
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Obeardone, the card *IS* linked to a central database. The card is much like an actual debit card in that it's linked to an account. You can even add/remove money from that account. The difference is that the account doesn't have anyone's name on it, it just has an account number which is coded into the card. ANYBODY can add/remove money from the account, assuming they have a card with the correct magnetic strip. Committing fraud by producing fake cards is just as tough as it would be with a regular debit card. |
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Try googling on "stored value card". It's your basic concept, with the caveat that the providers like to make a little money from transactions flowing through their tanks. (A couple of bucks per transaction, not a couple of pence for a year) |
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A few years ago American Express had the internet shopping card that was sold at 7-11 stores. This card was annonymous and after a few months they pulled the plug. People were ordering merchandise off of TV making the first installment payment but they never added money on the card. They got the merchandise and never made the the other installments. |
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They don't have to charge a transaction fee. They get to keep your money (and earn the float) until you use the card. That's how the banks who issue travellers' checks make money. |
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UnaBubba: Why is this any more effective than cash for terrorist use? As mentioned before, it cannot be used online and can only hold $20. It's no more effective to a terrorist than just carrying cash. |
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Noglider, thanks for brinking that up. Didn't think of that. |
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Possibly you have never been to France and are thus unaware of a system essentially identical to what you describe. |
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