WHILE Swedish authorities dished out sentences of between eight months and a year yesterday to the three founders of illegal file-sharing website The Pirate Bay, a relaxed Peter Sunde was at the London Web Summit warning of the risks of the continuing push towards a cashless society.
Sunde, who was given eight months for copyright infringement but plans to appeal, told delegates at the £1,000 a ticket event that with all current digital transactions being traceable, and with no anonymous alternative, people could start to change the way they behave for fear of having their spending habits exposed (not withstanding embarrassing expenses claimed by MPs).
He predicted people will avoid spending their money on potentially controversial transactions. “If you want to give money to the Red Cross that’s fine you can stand up for it, but if you want to buy porn or give money to left or right wing extremist parties because you really believe in their cause, [while] it’s not illegal, everyone can see that you did that and that is the problem.”
With only nine per cent of transactions in Europe being made with cash and the number shrinking he called for an urgent discussion on the matter.
Sunde issued the warning as he sat alongside John Lunn, director of innovation at Paypal, who he accused, along with the major credit card companies, of being able to essentially close down companies by blocking payments, as experienced by Wikileaks, without legal direction because of political or financial pressures.
The Swede said: “Companies like Paypal aren’t helping either. They still owe me £4000 which they kept in one of our accounts because they didn’t like the cause and that is a big problem you wouldn’t have with cash.”
Lunn refused to comment.
Alternative payment systems such as Bitcoin – where virtual cash stored on an electronic device can be sent directly to recipients without being easily monitored – could help solve the problem was it not for the mountain of expensive legislation between those wanting to enter the banking sector and operating legally, Sunde said.
“When I talk about Bitcoin some people get upset that I say it’s probably illegal because in-order to have some sort of currency you have to have an anti-money laundering scheme, an anti-terrorist scheme … and if you don’t you’re breaking the law.
“As long as Bitcoin is very small no one would really care but with Wikileaks and big brands using it, it becomes more obvious and is going to be a big attack on the system and if you are not aware of that being a problem you are going to have a problem yourself.”
Sunde, who has recently set-up micro-payment site Flattr, acknowledged the need for some monitoring and legislation of financial transactions but said there needs to be a compromise.
He also pointed out the lack of outlets to exchange Bitcoins into some other form of useful currency.
Meanwhile Paypal are set to bring there far from anonymous online payment system to the high street using smartphones.
Lunn said: “Paypal Here allows you to check into a store using the App so you don’t need to take your phone out of your pocket to make a payment because they can see your Avatar on their till; you pay, you leave.”
The PH device, similar to the iZettle card-reader that has just launched in the UK, can also be plugged into a smartphone allowing mobile card transactions but charges a hefty 2.7 per cent per swipe.
Upstart Ben Milne, founder and CEO of the US internet instant payment system Dwolla – which charges a flat 25 cents per transfer over $10 – believes, like Sunde, people should have cheap and direct control over their money.
He said: “Everyone should be able to exchange money with virtually anyone in real time virtually free. It seems illogical that money should be worth less because you exchanged it.”
Sunde added: “It doesn’t cost that much any-more [to transfer money electronically] even though the banks and credit card companies believe they can charge that.”
However Milne dismissed the idea of anonymous transactions indicating a cashless society will soon be upon us, but did call for the banks to improve data protection.
Paypal’s John Lunn went one further questioning the need for banks.
He said: “[With chip-and-pin the banks] have completely divested all their responsibilities in looking after your data so why bank with them, what are they giving you? I stopped using my bank when they gave me a 13-digit password.”
The Meddler 