E-Wallets and Digicash Need to Happen Now


By Samuel Greengard

Someday, perhaps before the onset of the 22nd century, we might actually have some type of usable digital wallet and micropayment system. Let’s face it, having to use coins for vending machines and parking meters is aggravating.

Even worse are small e-transactions between individuals—both in person and online. PayPal is clunky and expensive to use, Google Wallet is mired in Androidland, and Square—while incredibly useful for merchants—is too costly and impractical for individuals attempting to settle a small debt.

Some geeks have embraced Bitcoin, a service that has been around since 2009 and attempts to provide a low-cost or zero-cost way to conduct instant peer-to-peer financial transactions. The service operates globally over computers and mobile phones.

However, the virtual currency has fluctuated wildly in recent weeks—reaching a high of $266 in early April to a low of $55 a few days later. Most of us aren’t into speculating. We just want to make or receive a payment.

Another startup, OpenCoin, is attempting to create digicash. The open-source electronic cash project is developing a system that consists of “minting software, wallet software and everything that is necessary to have a system for anonymous electronic transactions.”

These services are appealing to some because they offer a high level of privacy, and they are fast and easy to use. The payments aren’t processed through a bank or clearinghouse.

Translation: While there are some legitimate reasons for desiring privacy, there are other less upfront reasons. For example, these private money transactions are great for people who get paid in cash and want to evade taxes; individuals engaged in illicit activities such as drugs, gunrunning, porn or money laundering; and those living in a delusional or paranoid state—which seems to encompass quite a few people these days.

We desperately need e-cash systems or some type of e-wallet that works in the real world. But the current situation resembles the early days of computers, operating systems and email, with their proprietary standards, walled-off systems and scores of upstarts battling for control. This may be how capitalism works—or perhaps more accurately how it doesn’t work—but, in the end, it’s a genuine pain in the wallet, and it’s not serving society well.

My money is on continued chaos—at least for the foreseeable future.