Banking on E-Payments
In TV commercials for a financial services company, Bill Cosby used to look at the viewer and intone, "Because ... it's my money."In TV commercials for a financial services company, Bill Cosby used to look at the viewer and intone, "Because ... its my money." That message must be understood whenever the Net is propounded as a forum for payment processing. When money is involved, the minimum standard of service is highbut events of the past few weeks demonstrate that the robustness of electronic payment networks, and the certainty of punishment for those who attack them, are less than they should be. Problems have been pervasive. PayPal users suffered through five days of outages early this month. The PSIGate service experienced two extended interruptions in that same week. The Royal Bank of Scotland Groups WorldPay appeared to be the target of a distributed-denial-of-service attack Oct. 4, and Authorize.Net endured similar abuse near the end of last month. Some of these disruptions were due to accident and incompetence, but racketeers attempting extortion caused others.
These warnings of vulnerability come at an awkward time, in view of this weeks planned beginning of the virtual-payment era defined by the Check Clearing for the 21st Century Actknown for short as Check 21. Ironically, Check 21s vision of replacing paper checks with electronically transmitted images had its genesis in post-9/11 attention to systemic vulnerabilities. It was recognized that a stoppage of air transportation, such as the one that followed the terrorist attacks of 2001, inflicts damage on financial operations that depend on moving pieces of paper. Its no improvement, though, to transfer transactors dependence on physical documents to digital networks not ready to bear the responsibility.