Shrinkage – And Two Technology Predictions

<&sol;p>&NewLine;<p>&NewLine;A family friend who works at a major retailer reported one night over a drink that he had the strangest of days&period; He made goal &lpar;good for him&rpar; selling high-end merchandise to individuals he knew in his heart of hearts were thieves using a stolen credit card&period; Management was called&period; Security was called&period; But in the end the transaction approved because that sale would contribute towards the retirement of that day&&num;8217&semi;s sales goal&period; After all&comma; the sales clerk&comma; and his manager&comma; and the store would all get paid&period; And the thieves would look oh so good in their new duds&period; Only the credit card company would be taken to the cleaners&period; 4 out of 5 isn&&num;8217&semi;t bad&comma; right&quest; Wrong&period; And shame on the IT industry for not fixing this&period;<&sol;p>&NewLine;<div class&equals;"mh-content-ad"><script async src&equals;"https&colon;&sol;&sol;pagead2&period;googlesyndication&period;com&sol;pagead&sol;js&sol;adsbygoogle&period;js&quest;client&equals;ca-pub-9162800720558968"&NewLine; crossorigin&equals;"anonymous"><&sol;script>&NewLine;<ins class&equals;"adsbygoogle"&NewLine; style&equals;"display&colon;block&semi; text-align&colon;center&semi;"&NewLine; data-ad-layout&equals;"in-article"&NewLine; data-ad-format&equals;"fluid"&NewLine; data-ad-client&equals;"ca-pub-9162800720558968"&NewLine; data-ad-slot&equals;"1081854981"><&sol;ins>&NewLine;<script>&NewLine; &lpar;adsbygoogle &equals; window&period;adsbygoogle &vert;&vert; &lbrack;&rsqb;&rpar;&period;push&lpar;&lbrace;&rcub;&rpar;&semi;&NewLine;<&sol;script><&sol;div>&NewLine;<p>&NewLine;When we mosey on down to the local mall in search of newer blue jeans&comma; bolder ties and to hasten the onset of the Shoe Event Horizon&comma; we find a curious exchange taking place&period; People are exchanging the use &&num;8211&semi; just the momentary use &&num;8211&semi; of a small plastic rectangle in exchange for material goods&period; Yes&comma; credit cards are magical things&comma; enabling us to buy what we want not based on full faith and backing of the US Government &lpar;which&comma; these days&comma; may be questionable&rpar;&comma; but our own good faith and credit&period; We promise to pay what we owe &&num;8211&semi; sometime later &&num;8211&semi; to get what we want right now&period; And we agree to pay a rental fee on what we borrowed if we&&num;8217&semi;re not prompt in making good on our <a class&equals;"wpil&lowbar;keyword&lowbar;link" href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;category&sol;loans&sol;amp&sol;" title&equals;"loan" data-wpil-keyword-link&equals;"linked" data-wpil-monitor-id&equals;"261">loan<&sol;a>&period;<&sol;p>&NewLine;<p>&NewLine;But what if the system is broken&quest; If any one party can be put at a disadvantage as part of such transactions&quest; Well&comma; if it were you or I&comma; we&&num;8217&semi;d simply stop using the card and pay using another&comma; or by check or &lpar;gasp&excl; It&&num;8217&semi;s so old fashioned&rpar;&comma; cash&period; And if a store found the paperwork and fees offset the value of handling customers quickly&comma; or if they got ripped off and had to eat the cost&comma; they&&num;8217&semi;d refuse that virtual tender&period; Or raise their prices to cover the costs&period;<&sol;p>&NewLine;<p>&NewLine;But what if the party put at a disadvantage was a card issuer&quest; Some giant&comma; soulless bank with a heart as cold as its mortar and brick facade&period; They deserve it&comma; we say&period; Couldn&&num;8217&semi;t happen to nicer guys&period; Except that all of us eat that cost each time a fraudulent transaction takes place&period; We pay with higher interest on our credit accounts and bank fees that nickel and dime us to make up the loss&period;<&sol;p>&NewLine;<p>&NewLine;So why the interest in this&quest; Because the nature of retail sales hasn&&num;8217&semi;t changed much in since the introduction of the credit card&period; And that has given thieves the opportunity to find weaknesses they can exploit&period; And it denied us who sell IT solutions the opportunity to provide new and improved systems to capture&comma; in a secure and trustworthy fashion&comma; all those promises traded in for shoes and purses and bling&period;<&sol;p>&NewLine;<p>&NewLine;But it&&num;8217&semi;s worse than just a few stolen goodies&comma; because not all the stakeholders are in on protecting the chain of trust involving the consumer&comma; the retailer and the card insurer&period;<&sol;p>&NewLine;<p>&NewLine;So I have a few predictions on how this will be fixed&colon;<&sol;p>&NewLine;<p>&NewLine;Prediction 1 &&num;8211&semi; Adoption of Pay-By-Phone&period; 100&percnt; chance of widespread within two years&period;<&sol;p>&NewLine;<p>&NewLine;This is already widespread in Europe&comma; but to support transactions of greater value&comma; something more could be added&period; Like taking a picture of the person buying the goods &lpar;think facial recognition&rpar; or their thumb &lpar;think optical fingerprint matching&rpar;&period;<&sol;p>&NewLine;<p>&NewLine;Prediction 2 &&num;8211&semi; Adoption of RFID down to the item level&period; 60&percnt; widespread within 2 years&period;<&sol;p>&NewLine;<p>&NewLine;As the cost of RFID tags continues to shrink&comma; it will become possible to add them to every item of value&period; Sown into each hem&comma; each collar&comma; each bottle of vitamins and each CD case&period; And not just the one-bit tags used to sense that something is leaving prior to being paid for&comma; but to track if the item was ever paid for&period; Some thieves &&num;8220&semi;return&&num;8221&semi; merchandise and ask for store credit&comma; effectively laundering their thefts&period;<&sol;p>&NewLine;<p>&NewLine;And someone will have to sell all those new point-of-sale systems and scanners&period; Oh&comma; I do so love the smell of a new opportunity&period;<&sol;p>&NewLine;