Bulletproof Money Will Be a Thief's Worst Nightmare – and Help Drive the Mobile Wave

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Imagine checking in at the airport, buying a cup of coffee at a local café, even paying for your clothes or groceries at the store's register… all with a quick wireless scan of your smartphone.

It's all possible today, thanks to a new type of tech called Near Field Communications (NFC).

No coins to fumble with. No waiting while the store's machine dials up your bank. No receipts to sign and then stuff into your pocket. The spread of NFC technology is a win-win for the customer and the merchant alike.

With NFC, your phone becomes your wallet. It's able to "talk" to any vendor, bank, brokerage, or credit card firm you like. This technology is set to take the world by storm.

In as little as a decade, billions of people around the world will convert to digital currency as their means of paying for the things they need every day.

There's just one thing slowing it all down right now – mobile security.

Using mobile phones as de facto wallets alarms some people. They fear that if your phone gets stolen, thieves could gain access to every bank, brokerage, or store account you have.

But that's about to change…

Making Digital Money Bulletproof

Indeed, much to the chagrin of thieves and con artists, mobile security will hasten the advent of bulletproof digital money used around the world.

I had the chance to talk about this with Michael Saylor, author of the best-selling new book "Mobile Wave: How Mobile Intelligence Will Change Everything." Saylor, who also serves as CEO of MicroStrategy Inc. (NASDAQgs:MSTR), told me alarmists are missing the big picture:

"I think the most important thing to be said about mobile security, and maybe mobile identity, is there are one million organizations in the world that have obsolete, ineffective identification systems now. Most of these things – passports, credit cards, driver's license, even things we think are reasonably secure, aren't. And many things aren't secure at all.

"I think that it's now possible to create a mobile identity system that runs on a smartphone which is anywhere from 100 times to 10,000 times as secure. Not only are they more secure, it's impossible to counterfeit and impossible to forge."

In fact, there are three key security features Saylor believes will make mobile commerce the standard of safe business transactions in just a few years.

Mobile Security Feature No. 1: Fingerprint Scanning

Fingerprint tech is a standard security feature around the world. It works because no two people – not even identical twins – have the same fingerprints.

Believe it or not, fingerprinting is actually pretty old. It began in eighth-century Japan. But this ancient approach to security is about to get a big upgrade.

Since many smartphones have touch-sensitive screens, by definition, they work with your fingertips.

All we need to do is convert that screen into a scanner that takes the place of a password. That way, it only works for you. If you lose your phone or someone steals it, the device goes dead.

That's probably why Apple Inc. (Nasdaq:AAPL) just spent $356 million to buy AuthenTec, a mobile network security firm. The journal ZDNet says AuthenTec's sensors are state of the art in touch-based security.

"These fingerprint swipe sensors use a patented sub-surface technology to read the live layer of skin beneath the skin's surface where the fingerprint is first formed," according to the author of the ZDNet article. This makes them "much harder to fool than traditional fingerprint sensors."

Many tech experts believe this acquisition signals that Apple will soon employ fingerprint scans in both the iPhone and the iPad.

Mobile Security Feature No. 2: Eye Scans

The public already has a good sense of how this works. We saw it featured in the popular James Bond film "GoldenEye" from 1995 and the first "Mission: Impossible" that came out a year later, as well as 2002's "Minority Report." In that film, Tom Cruise's character John Anderton undergoes a back-alley eye transplant operation to evade the ever present eye scanners of the authorities.

Right now we have two main ways to scan the eyes.

The first is to focus on the retina, the round tissue in the back of your eye that contains a "screen" of cells that respond to light. That annoying "red eye" effect you see in bad photos is actually the camera capturing the retina when the bright flash goes off too fast for the pupil to close.

Saylor notes that the retina serves to "pre-process images," adding that scientists actually consider it a part of the brain.

Scanning the retina works to establish identity because it has a pattern of blood vessels unique to each person.

The second way we have of establishing identity via the eye is the iris – the colored ring around the pupil. It's a jumble of patterns. See, no two are alike. Even the iris in your left eye differs from the one in your right.

"The New York Police Department uses iris scans when booking suspects," said Saylor. "The city of Leon, Mexico, deploys iris scanners in crowded public spaces, where they can identify up to 50 people at once."

Mobile Security Feature No. 3: Voice Recognition

Most investors already know about voice recognition. They've seen it for decades in TV shows like the original "Star Trek" and in the movie "2001: A Space Odyssey."

In 2012, speech recognition tech has quickly been gaining ground. Apple uses it as a digital voice assistant named Siri that's in the most recent version of the iPhone. So millions of people already have a sense that voice tech is the wave of the future.

But Saylor rightly draws a sharp contrast between speech and voice recognition. The latter is based on the fact that each person's voice is distinct.

"Voice recognition doesn't try to figure out what you say," Saylor explained, "it tries to determine if the voice is actually yours. The software to identify your voice exists and would be an easy addition to the array of identity techniques available to mobile devices."

As I see it, these features and others that might appear later can greatly increase both business and personal security. And there's no reason why you can't blend several of them together – say, an eye scan with voice recognition – to provide deeper safeguards.

In the future, you'll have all sorts of biometric security features that will protect your assets and your identity. All of them can both protect corporate assets and empower the individual.

Finally, these same features could also exist inside your PC or even in different rooms within your home to give you a total security package.

We're not far from the day when ordinary folks will be able to defeat even the smartest hacker around, just by touching or looking into their phone's screen.

And it's all because the world is going mobile.

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About the Author

Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.

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  1. DaveR | September 6, 2012

    There is and will always remain flaws in any security systems; they are designed and implemented by humans and therefore they can be broken or corrupted by other humans. This includes the coming sophisticated biometric based digital security systems described in your article. Crooks including insiders will figure out how to capture individual's biometric data and impersonate them to steal into their accounts.

  2. Yardpilot | September 6, 2012

    Yes, this will happen. No, it is not a good idea. Yes, the hackers and other thieves will make hash of it. Yes, the underlying base statement that security for this will be "bulletproof" is so false as to be phony. Yes, if technology can develop it, technology can defeat it. No, bateries never go dead in cash.

  3. James | September 6, 2012

    Great, and when the first EMP pulse or X class CME (Coronal Mass Ejection) comes along and wipes out all electronic devices all trade will come to a halt, and people will have to resort to bartering for goods and services…

  4. Thomas Hegarty | September 6, 2012

    This type of money transfer is already widespread in Africa and elsewhere. Sophisticated infrastructure isn't in place but the mobile phone links are a vital conduit for money transfer and limited commerce.
    I'm going to say something now which will make you think I am mad. It needs to be said by someone, if just for you to consider.
    My concern is with the drift away from democracy in all the old democracies. Those in power "know whats best for you." What suits them best is more like it !
    Now, coming soon is the "cashless society" using tools such as those mentioned here.
    It will mean every time it is switched on or used, the powers that be will record every transaction and purchase as well as being able to track all your movements.
    Should you become an irritation to these authorities, why, nothing would be easier than to 'switch you off.'
    What are you going to do now, you can't even buy a tin of beans?

  5. Tom Hegarty | September 10, 2012

    TrapWire.
    Looks as though I was getting ahead of myself.
    If you live in America you'd better 'Google' up TrapWire!
    Coming to other countries soon !

  6. Tom Hegarty | September 10, 2012

    TrapWire.
    If you live in America, you'd better Google up TrapWire.
    Coming to a country near you soon !
    Looks like I was ahead of myself there!

  7. David Ganz | October 2, 2012

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    example was the terrific growth in GLPYY. In less than two weeks we are up 18%. Your info
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