Channel Zero: The Electronic Eye Series; The Mondex Scenario (transcript)

: TRANSCRIPT :

Originally Aired : March 27th, 1997 on CBC Television

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Prophets, seers and doomsday economists have all predicted the imminent apocalypse of our monetary system... and the birth of the cashless society. As the millennium draws to a close and prophecies begin to take on an eerie significance, one multinational corporation has bet its very existence on the universal acceptance of smart card technology that will ultimately abolish the commodity formerly known as cash.

Alan Borovoy;
General Consul Canadian Civil Liberties Association

You see, you don't get something for nothing in this life. The human condition is such that whatever we want has to be paid for with something else we want. And so the question is not, 'Should you have safety; should you have convenience; should you have security?' Of course you should! The question is, 'How much are you prepared to sacrifice of people's freedoms in order to get it?' Because we also want freedom.

SHOW TITLE: The Mondex Scenario

Frank Feather;
Author, CEO, The Future Consumer

I believe that in the future, everybody will have a smart card. And this will not just be a card with money on it, it will have multi-use.

A Cashless Society?!

Smart cards are the size and shape of standard credit cards, but contain a tamper-resistant chip that allows its user to download "money" from their bank account onto the card via ATM, internet and even the telephone.

The Chip

David Jones, PhD;
Computer Science Professor, McMaster University
President, Electronic Frontier Foundation of Canada

There's no reason to think that you couldn't have one smartcard that was your MasterCard, as well as your debit card, as well as your Mondex stored value card, as well as your welfare benefits card, as your health card, and your driver's licence, and your student card, and your library card, and so on and so forth.

I mean, all of that information can be digitized and, um, and in fact, don't take up a lot of memory. And memory is cheap so you could have one universal smartcard.

And, and, ah, I'm sure people at companies like Mondex are vying for that position in the marketplace. To be, to be the, in the end, the one universal smartcard.

Mondex International, a London-based company, is presently involved in the global roll out of their new smart card technology - a stored value electronic cash card.

Mondex is designed to hold up to 5 currencies on a single card and it allows direct peer-to-peer fund transfers without the intervention of a bank.

PR Lady;
Mondex Infocentre

So what I have here is the Mondex smartcard, with the microchip on the front of the card, ok? This is where your purse is, where your value would be stored when you've moved money from your bank account onto your card.

SPECIES

A class, kind or group of biological lifeforms marked by common characteristics and qualities.

Liss Jeffrey;
Executive Director & SR. Research Associate The McLuhan Program

As McLuhan loved to say "Nothing is inevitable, so long as we're prepared to pay attention!" It's paying attention; it's figuring out what questions to ask; what properties of the media to look at; how it is that this is having its impact on us as individuals, on us as households, on us as whole cultures and societies, on us as an overall planet.
... Frank Feather;
Author, CEO, The Future Consumer

The currency of the day is literally, always what is most current. So at one time it was sea shells, then it was metal, then it was paper, then it was plastic. Now, what is most current today is information technology, and bits, and microchips.

Canada's Royal Bank and CIBC are two of 17 founding Mondex organizations worldwide. Guelph, Ontario was chosen as North America's initial launch site.

Tim McNaughton;
Royal Bank/Mondex Manager Pilot Implementations Stored Value Cards

In terms of predictions we came in expecting three hundred merchants, and our target is eight to ten thousand consumers. We've exceeded the merchants - we have five hundred merchants - where in the early days, with the cardholders, we're just starting to go out to the general public, so our target is still eight to ten thousand people to have the card in use by the end of the year. ... Merchant; Guelph, Ontario

Ahem, well, we just had a bank representative come around. They said that they had, like, a one year free pilot mission, whatever - just a trial. So we said 'Alright, well, we'll try it,' but we haven't actually used it yet, to be honest.

[M.Bouyaner]

Marlene Boyaner;
CIBC General Manager Stored Value Cards, Mondex

When we first introduced Debit people said, 'well, I already have credit cards, why do I need debit cards?' Now we're introducing electronic cash people say, 'Well, I have credit and debit, why do I need electronic cash?'

Each of these systems do something different for you.

And what we find is that each of these systems do something different for you, and people ultimately want the choice and convenience.

So based on the research we've done - and it was quite extensive - we expect very good acceptance, ah, and usage upon this. ... Barbara;
In the mall, Guelph, Ont.

They were very probing. They were asking, 'What were my sales systems now - Did I use cash, cheque, credit card, um, preferences all the way along, where did I shop - that sort of thing, to see who they could target.

Guelph POPULATION 94,000

Karen Farbridge, PhD;
Alderperson, Ward 1, Guelph, Ont.

Well there's huge amounts of money being thrown at this because there's a, you know, there's a lot of money to be made from this. If you get your foot in the door first, you've essentially established a monopoly, um, so, you know, they've got a lot of money to throw at a community, they've got a lot of money to throw at through a PR firm. they have a purpose: They want to, you know, get their foot in the door at Guelph, and once they have that, they're wanting to use that to be able to get into other communities.

[The Pitch]

Marlene Boyaner;
CIBC General Manager Stored Value Cards, Mondex

Mondex is the only reloadable cash card that lets you do person to person transfers. The others don't do that. Today Mondex is the only card that lets you have at-home accessability; it really is leading edge. ... PR Lady;
Mondex Showroom

Gives you access to physical cash, versus the telephone banking that you're able to do now by paying bills over the phone, ec-cetera, ec-cetera; this is giving you cash in your hand, so we term them 'Mondex Moments'. But, you think about the time that the pizza guy's at the door and you're two bucks short, ahh, you know, you'll have the capability of getting that two dollars from your bank account - instead of opening up your piggybank and counting all those pennies.- putting it on your card and paying the delivery man. ... Joe Clark;
Public Affairs and Community Relations Director, Mondex

Mondex and two banks came to the city and said, 'We would like to come and use Guelph as the pilot community; is this something that would be of interest to you? Would you be amenable to it?' Man on the Street;
Guelph, Ontario

I don't think that's the notion, [that] they're approaching this as a 'test'. It's a test of the best way for you to swallow it. 'Cause you're not going to have a choice about swallowing this, they're going to shove it down your throat and they simply want to find out the best way to distract you. ... [D.Creech]

David R. Creech;
Guelph City Administrator

When the banks first, ah, decided this, they came in and talked to Council, um, sort of quietly, and explained to them - in a fair amount of detail - what Mondex was all about, uhm, and really tried to emphasize the positive things of Mondex, and the benefit that it would bring to the city.

Spin...

Joe Clark;
Public Affairs and Community Relations Director, Mondex

My understanding was that the city, in turn, said that, ah, you know, 'We're not endorsing it; we're not going to endorse your product or service, but, ah, if you'd like to come into the community and, and do it, that's ok.'

...Counterspin

Karen Farbridge, PhD;
Alderperson, Ward 1, Guelph, Ont.

The recommended motion was for us to support - and they didn't describe it as being Mondex in the motion, but as an 'alternative financial mechanism'. I can't remember the exact wording, uhm: that motion was changed to read "enthusiastically support", and then it also gave direction to the City Administrator to, ahm, co-operate with, ahm, with this endeavour.

...On The Buses...
David R. Creech;
Guelph City Administrator

Mondex has, um, been helping the city in terms of, ah, parking metres and the bus operations and some of the snack bar operations, and providing some of the upfront funding to get us into new equipment that will allow us to take, to make use of the Mondex cards. ... Karen Farbridge, PhD;
Alderperson, Ward 1, Guelph, Ont.

We learnt last week, at a committee of Council, that, ahm, there's going to be the conversion of the, ah, fare ticket, ahm, collection systems so that they were able to take Mondex cards. Ahm, I mean, I guess I can see that as being part of what Mondex is trying to do, so that you can use the Mondex cards on the buses. However, we also learnt that the city's share of that is going to be fifteen thousand dollars, ahem, I've got a problem with that. I don't think that city taxpayers should be paying for the conversions of parts of their busses basically, essentially to provide a monopoly for a private business endeavour. Ahm, so, you know, if they want to pay for the whole thing, you know, then fine, they can pay for the whole thing. ... David R. Creech;
Guelph City Administrator

The reason that we're sharing the cost is, ah, from a couple of points of view: one, if we can get new equipment on the bus, and if we can eliminate or significantly reduce the amount of cash that we're taking on the bus, um, we, we presently have about one-and-a-half to two people full-time that count cash from the busses. Um, if I'm not taking that cash from the busses I can reduce my staff costs, um, through, ahm, not having to count as much cash. In addition to that, by Mondex coming in, they've made a commitment at this stage to provide a significant amount of advertising on the busses for, um, for Mondex specifically, and it's quite a large amount. ... Bus Driver;
Guelph, Ontario

I have no idea anything about it, and I don't even pretend to...sitting there on the bus when I got on on Friday, and I don't know anything...thing was sitting there. I don't know if it's working, it isn't working, or nothing; all's I know is it's sitting there.

... on CORPORATE DEFLECTION

[M.Kingwell]

Mark Kingwell, PhD;
Writer, Professor, University of Toronto

Modernity is a story of institutions becoming more and more distant from the people they're supposed to serve. And becoming more and more opaque, so that you get this kind of Kafka-esque vision of the bureaucracy which is constantly deflecting you. And you're trying to understand what's going on, and how your life is being impinged upon by the actions of institutions; in particular, the state. But not just the state. Ah, increasingly now, business and corporations which are opaque.

So the response then is not to make them less opaque, but to hire these people who will, will speak to us from those places. So we get, we get PR people for corporations, we get spokespeople for governments, and they're our single conduit from the institution to our own lives. Can we trust what they tell us? Of course we can't, because there's no way of verifying it. There's no independent means of matching that against reality. That is the reality we get; that's all we get.

So this idea that the spindoctor, the salesperson, ah, it's not just about consumer culture - I mean, we're, we're being sold things twenty-four hours a day, in terms of products, but we know that - but we're also being sold ideas. We're being sold our lives in various ways by these people who speak form institutions to us. ... Joe Clark;
Public Affairs and Community Relations Director, Mondex

When you do have a legitimate product or service or you want to represent yourself, really what's required is, 'Ok, then expose yourself.' Tell people who you are and what you're doing and why you're doing it. ... Kim Redbourne;
Finance and Operations Central Student's Association University of Guelph

Mondex has met with us, ah, CIBC, and Royal Bank, and in that respect they have been talking to us and trying to get us to understand it and support it. But I think for, generally, for students, ahm, it's an advertising campaign around university and, well, in general.

" Now it's the time for the people of Guelph -the consumers of Guelph - to pick up their Mondex cards and experience this exciting new system. " Guelph Mayor Joe Young

Karen Farbridge, PhD;
Alderperson, Ward 1, Guelph, Ont.

I think we're seeing the confusion of the role of governance and the role of commerce: and in the world of commerce you're dealing with consumers, and in the world of governance you're dealing with citizens. ... Woman on the Street;
Guelph, Ontario

I don't, I don't even really like using Interac - just because I don't like banks. I find that they, um, there's, they scam a lot 'n they take a lot of money that's unnecessary. ... [J.R.Saul]

John Ralston Saul;
Writer and Essayist

This method, this method of changing things when people don't really want change is taught in business schools as a method for taking over corporations. Take the corporation, move it, and you change everything about the corporation in twenty-four hours. You don't do it in the first twenty-four hours, necessarily, you wait 'til you've got everything ready, then you go BOOM! Just - change everything. The disorder is so great that it - you're the one who knows where you're going and what you're doing, and so: you get what you want.

The Underpinnings
[What is Mondex?]

Tim McNaughton;
Royal Bank/Mondex Manager Pilot Implementations Stored Value Cards

We think Mondex is more than cash, and so we've changed ours into Mondex as "Simply More Than Money," and you talk about things you can't do with money, as opposed to, 'It just equals money.'

When paper money exchanges hands, no third party gets a piece of the action.
David Jones, PhD;
Computer Science Professor, McMaster University
President, Electronic Frontier Foundation of Canada

When paper money changes hands, no one, no third party gets a piece of the action, but with Mondex that changes: Mondex gets a piece of the action.

With Mondex that changes.

Mondex gets a piece of the action. ... PR Lady;
Mondex Infocentre

The other device that we have is the wallet, mmmkay? And the wallet would be used to move money from card to card, from chip to chip. ... David Jones, PhD;
Computer Science Professor, McMaster University
President, Electronic Frontier Foundation of Canada

When you load electronic money onto your Mondex card, ahm, instantly money is taken out of your own bank account and put into a Mondex account and, um, it sits there until you go to various retailers, pay out that money off your Mondex system, and eventually those retailers will go back to the bank and ask to be reimbursed. That period of time where the money is sitting in the, in the Mondex account is called the float, and essentially you've given Mondex an interest free loan. So at any time - you think of the hundreds of thousands of Mondex customers that there may be using electronic money floating around in the system - that's going to add up to a few million dollars at a time, perhaps.

[Simply more than money.] ...the digital shadow
PR Lady;
Mondex Infocentre

It also allows me to track the last ten transactions where I've spent money, because that information is stored in the card, it's not stored anyplace else. ... Lance Morgan;
Spokesperson, Central Student's Organization, University of Guelph

And if you sign up for the program, you get most of the stuff for free. And, so, they've got to make their money somewhere and I think it's going to be about selling the information. Cause if they can actually break down to how much I actually spent on my, on entertainment, that becomes that much more valuable to somebody else.

Mondex is similar to the two other forms of electronic cash - phone cards and reloadable cash cards - except that Mondex has a unique identifier on the card that can be linked to you: THE CONSUMER.

David Lyon, PhD;
Professor and Head of Sociology, Queens University

If you read the recent issue of Marketing News for example, you'll see that merchants like smart cards. Why? Because they act as tracking devices. It's precisely because of the tracking device aspect - that is, that a marketer can follow the trail, the footprints that you leave every time you make a purchase, or a phone call, or whatever it is. The fact that they can follow it is very attractive, because it means that they can build up a personal profile on you, the customer. ... Ann Cavoukian, PhD;
Assistant Commissioner Information and Privacy Commissioner/Ontario

Names and addresses have huge, huge market value these days. People often say, 'It's only my name and address, what's the big deal?' Your name and address fuels a multi-billion dollar direct marketing industry. It's, it's the raw material for a seventy five dol, seventy five billion dollar a year business in the United States, an eleven billion dollar a year business in Canada. So names and addresses and personal information have great market value.
... very specific purposes ...
David Lyon, PhD;
Professor and Head of Sociology, Queens University

Certain databases are not autonomous. Every time data is collected on a big system, that system costs an awful lot of money to put into place. It's technically very, very sophisticated and, ah, very expensive. And it has very specific purposes, whether it's set up for, to try to track welfare fraud, or to track consumer profiles. ... Bruce Phillips;
Privacy Commissioner of Canada

All of this technology has made the collection, ah, manipulation, and, and trafficking in personal information much easier and much more profitable, and therefore much more attractive to business. Ahh, the individual who provides this information - that's you and me and all the millions of us - have almost nothing to say about what happen to us thereafter.

...we have almost nothing to say about what happens to our personal information

Last fall the British company that sells Burberry coats purchased credit reports on 190 million Americans from TRW Credit Data Inc. Chances are you credit history was one of those sold; I know mine was.

Robert Ellis Smith; Wired

David Lyon, PhD;
Professor and Head of Sociology, Queens University

I think there is an ethical requirement on companies to explain themselves more: to explain why they want this kind of data; why they want to make these kinds of profiles. Ahh, it seems to me irresponsible. ... Ann Cavoukian, PhD;
Assistant Commissioner Information and Privacy Commissioner/Ontario

I want you to use it, for this purpose, for this transaction, and that's it. I don't want you to sell it to another company for marketing purposes - or if you do, I want you to get my consent first. ... Kim Redbourne;
Finance and Operations Centra Student's Association University of Guelph

There is a level of scepticism that is being discussed at the university right now, um, around the issue of privacy, um,what information is linked to the cards, and who will have access to that information.

... Marlene Boyaner;
CIBC General Manager Stored Value Cards, Mondex

We're very, very careful about our customers' information and how it's handled, so we don't sell customer information for anything. ... David Jones, PhD;
Computer Science Professor, McMaster University
President, Electronic Frontier Foundation of Canada

The bank, for privacy reasons, won't disclose any of your personal information to your supermarket, but they will disclose summary statistics: who has a big mortgage, who has a big car loan. Ahh, so banks do sell that information to supermarkets, for example.

THE ISSUE : Database sharing

Bruce Phillips;
Privacy Commissioner of Canada

The issue of database sharing, or database matching and warehousing, is the coming battleground for privacy protection, ah, both in the public and private sector. There are enormous quantities of highly sensitive and intimate personal information about all of us now contained in databanks all over the place. ... Ann Cavoukian, PhD;
Assistant Commissioner Information and Privacy Commissioner/Ontario

And with the growth of the internet and network communications, you're not going to have any ability to access that information and correct it if it's incorrect. And that's a huge problem.

... David Jones, PhD;
Computer Science Professor, McMaster University
President, Electronic Frontier Foundation of Canada

The corporation has an economic interest - and, in fact, a duty to their shareholders we should recognize - to exploit the system as much as they can financially. And so, if transaction records of people's purchases has value and Mondex is legally allowed to sell it, they should sell it. And if they don't sell it, they're being negligent to their shareholders. ... PR Lady;
Mondex Infocentre

So we have the wallet reading card one or card two... ... Alan Borovoy;
General Consul Canadian Civil Liberties Association

You see so often what happens, these things become something like the sorcerer's apprentice: we create the instrument, there's a legitimate reason for it, but the instrument goes on and becomes a monster in its own right. And largely because we didn't create the safeguards at the time; we weren't, we didn't address ourselves; we didn't ask the hard questions; we just looked at the convenience, the administrative convenience or whatever other legitimate objective had to be resolved; but we didn't face the price that may have to be paid.

The consequence of traceable transactions, not to mention traceable communication, is that the Internet or related networks may become the foundation of the opposite of anarchy life in a transparent data ocean, a life in which data recording everyone's movements, tastes, purchases, medical history, reading habits, and contacts with officialdom are commodified and available to some, and perhaps even to all. Perhaps the information ocean is not, after all, the right metaphor. Perhaps we are headed for the information fishbowl.
Michael Froomkin;
Professor of Law, University of Miami, Florida

Sally Jackson;
Office of the Privacy commissioner of Canada Director of Public Affairs

Yes, I think we're on the, essentially we're on the cusp of the issue. We're at the point that the technologies are now available to collect the most intimate details of our medical background, our genetic make-up; we're at a point at which governments and the private sector have tools like smart cards, like data ware-, building data warehouses which can assemble all of this material. ... Andrew Clement;
Faculty of Information Sciences University of Toronto

But we do not have the policies, the legislation, the understandings, um, that will allow us to maintain control over that, and it's like time bombs waiting to go off. And we will find ourselves down the line waking up, I think, to the fact that we have lost control of, of information.

Swindon, UK 1st Mondex launch site

David Jones, PhD;
Computer Science Professor, McMaster University
President, Electronic Frontier Foundation of Canada

In Swindon, ah, in the UK, ah, Mondex had a test run similar to what they're doing now in Guelph, Ontario. And a group, like ours, called Privacy International, was concerned about whether the Mondex technology was truly anonymous, which is how Mondex was describing it at the time. It was, 'Anonymous, just like cash.' And they filed in court an action claiming that Mondex was guilty of false advertising, and in the end Mondex had to admit that, in fact, their system wasn't anonymous, and they withdrew the word anonymous form all their Public Relations. And if you look carefully at all the material Mondex is distributing their, their test run in Guelph, you won't find the word anonymous.

... Bruce Phillips;
Privacy Commissioner of Canada

You are literally defenceless when it comes to your privacy in the private sector, in the commercial sector. There are almost no laws, except in Quebec, which cover what they do with your information. So you, and I, and every, all the rest of us, are going naked before the world. Believe me. ... Man on the Street;
Guelph, Ontario

The question that comes to mind is, do we have the time - or care - to make those decisions. Those are difficult decisions and involve taking responsibility. And I think that most of us feel so poorly informed, so poorly have access to such little information that we just decide, 'I don't know. You know, I, I don't know the truth anymore, and I prefer, I'd prefer if someone made those decisions for me.' ... Liss Jeffrey;
Executive Director & SR. Research Associate The McLuhan Program

I we, as citizens, sit back and let things just take their course; sit back and let those who would profit from these machines without any concern for those they may hurt or displace in the process; if we sit back and just let bureaucrats in Ottawa, or anywhere else in this country simply make the decisions; we're kidding ourselves about what kind of society and future we're going to end up with.

[Guelph]

Mark Kingwell, PhD;
Writer, Professor, University of Toronto

The cashless society is a conflict between our desire for efficiency, and our fear of outside control. So, we like the idea of the cash card, and we like the idea of Interac, because it means it's more convenient for us to acquire goods in various ways. You know, go and have our consumer transactions that are made smoother, are made less frictionful. But at the same time we have this nightmare vision, which is apocalyptic, of some external force controlling us, in a way, by seizing our assets. So the scenario from Margaret Atwood's novel... ...
She got up and went to the kitchen and poured us a couple of Scotches, and came back and sat down and I tried to tell her what had happened to me. When I'd finished, she said, Tried getting anything on your compucard today?

Yes, I said. I told her about that too. They've frozen them, she said. Mine too. The collective's too. Any account with an F on it instead of an M. All they needed to do is push a few buttons. We're cut off.

But I've got over two thousand dollars in the bank, I said, as if my own account was the only thing that mattered. Women can't hold property any more, she said. It's a new law. Turned on the TV today?

- The Handmaid's Tale Margaret Atwood ...
Turned on the TV today?

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Transcribed by Chris Rowley
Office Administration : Sarah Aston, Stephen Crowhurst.

Last modified by Amphibious Designs/Agt.Hallam on 03.31.97.

� Channel Zero 1997