cashcard

In the UK most people now use 'chip and pin' debit cards - you put your card in a handheld machine, type in your pin number, and your account is debited automatically.

What if the card had a numeric LCD display, a cheap infrared transceiver and a numeric keypad ? The keypad would have two extra buttons - 'pay' and 'receive'. You would 'charge' the card with money by putting into an ATM machine.

When you wanted to pay someone, you'd each type the amount into your cards, then hold them together; you'd press 'pay' and they'd press 'receive'. Your card would be debited and theirs would be credited. If there was a difference in the two amounts, the payment wouldn't go through.

The next time you stick your card into the ATM machine, any increase would be credited directly to your account - the equivalent of paying cash into the account.

Security issues would be interesting to consider. You could type in a PIN number every time, or else use a thumbprint sensor (complex/expensive/bulky). There could maybe be a 'panic' button that caused the card to irreversibly fry itself, in case of mugging. Standard anti-fraud mechanisms from the current chip&pin systems would still apply.