Testimony before the national commission of electronic fund transfers

Abstract

Abstract : This report contains testimony given 27 October 1976. The author points out that the phrase 'EFT systems' is ill-defined. There are many such already in existence, including the automated clearing house, the cash terminal, and the point of sale terminal. Descriptive billing is a form of a EFT system; the national networks that are operated by organizations such as National Bank Americard are EFT systems. Each deals with payment exchange; each represents an implementation that depends very critically on electronics and computer technology. The authors main discussion is of what he calls 'the fully developed environment' in which the merchant and his bank plus the customer and his bank are electronically linked to complete a transaction. Systems of this kind are beginning to appear, but will become increasingly more important and will be accompanied by increasing problems of confidentiality, security, and privacy. The obvious problem in EFT systems is the unauthorized use of information by authorized recipients or by organizations holding it. To the extent that existing legislation deals with privacy, it attempts to set norms for proper usage of information.