Abstract
Mobile payments and bitcoins represent a leap forward in payments. Acknowledging that they are different, yet recognizing a common “digital” denominator, this concluding chapter outlines their salient features in the broad context of the historical evolution of payment mechanisms operated in the framework of a classical model. Thereunder, a payment order issued to a paymaster initiates the transmission of monetary value from a payer-debtor to a payee-creditor. The chapter points out that the mobile payment introduces complexities and variations reflecting its digital nature. At the same time, fundamentally, its operation is premised on that of the classical model. Conversely, not only that Bitcoin introduced new money-equivalent, it is further premised on a decentralized network within which monetary value moves without the involvement of a paymaster.
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Notes
- 1.
Particularly, Benjamin Geva, The payment order of antiquity and the middle ages: A legal history (Oxford and Portland, Oregon: Hart, 2011), in particular at Ch. 1 [4] (1); Benjamin Geva, The law of electronic funds transfers (New York: Matthew bender, loose-leaf) at § 1.04[6].
- 2.
Charles Proctor, Ed., Goode on payment obligations in commercial and financial transactions, 2nd ed. (London: Sweet & Maxwell, 2009), p. 11.
- 3.
There is no such thing as “a man paying himself.” See Faulkner v. Lowe (1848), 2 Ex. 595 at 597, 154 E.R. 628 at 630, per Pollock C. (in argument). Hence, “[p]ayment, necessarily implies two distinct persons.” John S. James, ed., Stroud’s judicial dictionary of words and phrases, 5th ed. Vol. 4 (London: Sweet & Maxwell, 1977) s.v. “payment” at 1337.
- 4.
Excluding other tangible media such as clay in Ancient Mesopotamia, the only exception was face-to-face oral instructions.
- 5.
See definitions e.g. in s. 73 of the Bills of Exchange Act, 1882 (UK), 45 & 46 Vict., c. 61 (as am.) [“BEA”]; art. 1 of Convention providing a uniform law for cheques, 19 March 1931, 143 L.N.T.S. 355, Annex I [“ULC”]; and §3-104(f) of the Uniform Commercial Code Article 3 (1990, as am. 2002) [“U.C.C.”]. The order to pay must be for a sum certain in money and the instrument ought to be payable on demand.
- 6.
BEA s. 31; ULC art. 14; U.C.C. §3-201, ibid.
- 7.
By itself, the issue of the cheque does not constitute a transfer of the cover to the payee, even when such a cover is available in the drawer’s account. See e.g. BEA, ibid., s. 53(1).
- 8.
For the secondary obligation of the guarantor, and his release upon breach of the contract, see K. McGuinness, The law of guarantees, 2nd ed. (Toronto, Carswell, 1996) at 30–31, 565–66. Contrast with the autonomy of the letter of credit; see Agasha Mugasha, The law of letters of credit and bank guarantees (Sydney: The Federation Press, 2003), 136.
- 9.
See Benjamin Geva, “Consumer liability in unauthorized electronic funds transfers”, Canadian Business Law Journal 38 (2003): 207, 212–23.
- 10.
See also Benjamin Geva, “The E.F.T. debit card”, Canadian Business Law Journal 15 (1989): 406.
- 11.
In the USA, under federal law, the Consumer Credit Cost Disclosure Act, 15 U.S.C. §1631 (1968) [“CCCDA”], and Section 226.12 of Regulation Z Truth in Lending, 12 C.F.R. §226 (as am.) implementing it, govern a card accessing a credit plan, namely a credit card (defined in Reg. Z §226.2(a)(15)). For a debit card initiating an electronic fund transfer, see Electronic Funds Transfer Act, 15 U.S.C. §1693 (1978) [“EFTA”] and Regulation E 12 C.F.R. §205 (1981), (as am.) implementing it (particularly its Section 205.3(b)).
- 12.
See e.g. Benjamin Geva, “Recent international developments in the law of negotiable instruments and payment and settlement systems”, Texas International Law Journal 42 (2007): 685, 699–705.
- 13.
For a narrower view limiting mobile payments only to those “initiated and transmitted by access devices that are connected to the mobile communication network” as opposed to “payments, such as credit transfers or direct debits, that are only initiated and authorised via the internet using mobile [devices]” see CPSS, Innovations in retail payments, Report of the Working Group on Innovations in Retail Payments (Basel: BIS, May 2012): 13.
- 14.
Rogers Communications’ David Robinson was quoted to make the following blunt statement: “If you put a bunch of cards into a dead cow, they really don’t know each other. But if you put those cards on a phone, that gives you access to a camera, a user ID, a way to know where consumers are, and what they want.” Payment Source, Emerging Payments Vol.1 No. 1, 26 September 2013.
- 15.
Tokenization is to be distinguished from encryption. The latter is an obfuscation approach that uses a cipher algorithm to mathematically transform sensitive data’s original value to a surrogate value. The surrogate can be transformed back to the original value via the use of a “key”, which can be thought of as the means to undo the mathematical lock. So while encryption clearly can be used to obfuscate a value, a mathematical link back to its true form still exists. Tokenization is unique in that it completely removes the original data from the systems in which the tokens reside. See e.g. http://perspecsys.com/resources/cloud-tokenization-primer/?pi_ad_id=43615510328&gclid=CND36r38zckCFZAAaQodlX8DOA.
- 16.
A baseband processor is a device (a chip or part of a chip) in a network interface that manages all the radio functions (that is, all functions that require an antenna). It is separate from the application processor (AP) which is the main processor.
- 17.
An electronic circuit is composed of individual electronic components, such as resistors, transistors, capacitors, inductors and diodes, connected by conductive wires or traces through which electric current can flow.
- 18.
A semiconductor is a material which has electrical conductivity to a degree between that of a metal (such as copper) and that of an insulator (such as glass).
- 19.
The TSM had been mostly involved in NFC payments discussed further below.
- 20.
It also provides “life cycle management services” such as card deletion from stolen or lost devices as well as where they are not wanted anymore.
- 21.
For the features of money as a unit of account, medium of exchange and storage of stable value, see e.g. N Dodd, The sociology of money: Economic, reason & contemporary society (New York: Continuum, 1994) at xv.
- 22.
For coins such was the case in Lydia around the seventh century BCE. For banknotes such was the case in England in the course of the eighteenth century CE. See Geva, The payment order, above note 1 at 84–85 and 476–489 respectively.
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Geva, B. (2016). Mobile Payments and Bitcoin: Concluding Reflections on the Digital Upheaval in Payments. In: Gimigliano, G. (eds) Bitcoin and Mobile Payments . Palgrave Studies in Financial Services Technology. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-57512-8_12
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