Comment by reisse | Hacker News Reader

Comment by reisse | Hacker News Reader

We had stored value card payment system in Uzbekistan somewhere from 2003-2005 to 2010-2012. But no-one ever called it "stored value card", basically, I learnt the word today :) Everyone just called it "offline cards", in contrast with "online cards" which required Internet to do transactions.

The system was called UzKart (do not confuse with UzCard, which is modern online successor of that system). On the day when salary was paid, you had to find an online ATM or internet-connected terminal in the shop, and "load" money to the card. Then, you could use the money on the card to pay in offline terminals. Balance could be checked directly in offline terminals, you had to ask the seller to print it.

Sellers had a special offline card, called "merchant's card". In the end of the day they loaded all the transactions from an offline terminal to a merchant's card, and then brought the card to an ATM or a connected terminal, to synchronize payments with the bank account.

If, for some reason, at the time of synchronization some payments failed to clear, payer's card was banned and they had an angry call from the bank.

When the system was introduced, internet connection was expensive and unreliable. It co-existed with online cards, but merchants strongly preferred to deal with offline cards. As soon as mobile internet become cheaper and more widespread, offline cards died because of the hassle with "loading" and "unloading" them.

More info on UzKart and UzCard can be found (in Russian) here https://gazeta.norma.uz/publish/doc/text97703_uzkart_ot_duet... and here https://uzcard.uz/ru/news/post/uzcard-bankovskaya-tranzaktsi...

Which is similar to T-Money in South Korea, Octopus in Hong Kong, and later Suica in Japan. All of which if I remember correctly came before 2000.

They are still extremely popular in those region. One of the thing I dont understand is why these type of payment never took off in the West. Even things like Oyster card in the UK is only for transport but not for any other sort of payment.

Another point worth pointing out, Offline payment are much faster, with Sucia based on FeliCa capable of doing the transaction in less than 100ms. This is important in a transport system as heavily used as the Japanese transport. For people who are used to these type of payment, everything else just felt so slow.

With every iPhone now getting a Felica Chip built in, I was hoping this type of payment could take off. And yet nothing happened.

I don't know about Europe, but in the US, offline payments with regular credit cards are/were a thing.

In the old days, you could use an imprint machine to run the card, and mail in the charge slip. Raised numbers and imprint machines are uncool now, but they lasted a long time as backup in case the terminal wasn't working or the power was out.

As far as I know, most US cards include the metadata for offline charges, where the terminal processes transactions in bulk, but there's more risk for merchants than doing an online transaction.

Stored value cards are popular in transportation, where speed is important, fault tolerance is required, and connectivity is intermittent. But even for gift cards, it's more common to use the card as an identity token, and get the value from an online ledger; it makes alternate uses much simpler.

I'm always extremely leery any time those come out because the network is down. A furniture / appliance store in my hometown had an employee use the imprint machine to steal a bunch of credit card numbers, including my parents' card. They only found out because the police had been tipped off and found a bunch of carbon copy slips in the employee's apartment.

Just about any time an employee handles a card there's a risk of that. Waitstaff who pick your card up off the table and disappear with it for several minutes, the employee you hand the card to at a drive thru window, even employees who swipe it right in front of you could probably pass the numbers in front of a camera long enough to go back through the footage later and read off what they need.

The card readers we're supposed to navigate ourselves aren't perfect either, but it's much better when the card never leaves your hand. Honestly though I pretty much expect my card number will get stolen at some point. As long as I can keep an eye on my statements and my bank doesn't give me much hassle about reversing fraudulent charges when I see them it's not a huge deal.

> Waitstaff who pick your card up off the table and disappear with it for several minutes, the employee you hand the card to at a drive thru window

Is this a real thing? Germany is horribly behind on payment options, but even we have mobile terminals that you yourself handle.

In the US, we almost always hand the card to stuff and they almost always run it for us. It is only with the widespread adoption of technology like Apple Pay that this is changing in the US. No one is going to hand their phone to the wait staff, so the staff bring a terminal to the table.

Mobile terminals are starting to become a thing, but at least where I live it is very much the exception. Either you pay at the reception desk or hand your card to the staff at the table, depending on where you eat.

We sort of have two forces pushing in opposite directions:

* Many transport cards were NFC or RFID or otherwise "you don't have to take the card out of your wallet" years before general-purpose cards were. Now, many transit systems just promote "tap-on and off with your Visa and don't bother loading money into our closed-loop network." (Interestingly, I will note that Toronto's system at least is cheaper to ride if you do use the closed-loop card)

* Conversely, merchants-- especially large merchants-- have desperate desire to get away from the general purpose card networks due to high fees and sometimes clunky chargeback rules. Notice the handful of "Walmart Pay"/"Kroger Pay" apps that they'll support rather than enabling Apple or Google Pay at the till, or even things like Target and some petrol stations offering propriatery cards that connect to debit for settlement.

Transport cards could be appealing for the merchant audience-- they're likely cheaper to process and represent funds already confirmed by the transport operator. But they're not federated, so it would turn into a nightmare of a thousand individual integrations and a UX like the early days of (pre-Visa/MC branded) debit where you'd have to check if the merchant supported the specific network your card was on.

Closed loop card on transit is a free loan to the transit agency. Seems logical that they would prefer people use that.

The Octopus is the de facto transport pass in Hong Kong (well, it's started by the major transport companies) and commonly used in many shops, it's also used by some for building access.

Octopus takes an 1.5% cut, I'm not sure if it applies to the founding transport companies but I assume the money will flow back to them anyway.

Recently, some transport services started incorporating Chinese e-wallets like Alipay and WeChat Pay which utilizes QR codes, and the agony of seeing people (mainly Chinese tourists) repeatedly scan and fail at the gates blocking the whole queue during rush hours is quite depressing after years of smooth access.

Cheers.

There should be a Hong Kong HN meet up

> They are still extremely popular in those region. One of the thing I dont understand is why these type of payment never took off in the West. Even things like Oyster card in the UK is only for transport but not for any other sort of payment.

From my memory, some newsagents etc. did allow payment by Oyster. But there just wasn't demand for it.

In Japan at least, many people don't have credit cards and are scared of any kind of debt (perhaps because debts are more enforceable here). So that might be a factor.

Interesting. Thank you I will look it up.

We used to have a popular system like that in the Netherlands (which I totally forgot about until reading GP) called Chipknip ('knip' being Dutch for 'wallet'). The system was eventually discontinued in favor of contactless debit cards, though.

In the early 90s I lived in Guelph, Canada. We were one of a couple of pilot cities for Mondex, a stored value card system that I think was owned by MasterCard. The city got a bunch of funding to get Mondex working everywhere from parking meters to buses, payphones, and of course private businesses. Everyone who wanted one was sent a Mondex card and a portable card reader which looked like a small calculator. You could put your card in it and press your thumb on a button to make the display show your balance. That little device allowed you to transfer money between cards if I recall, but I never figured out how. You could also see your past transactions and set a card PIN.

One of the cooler things Mondex could do was an early form of online banking. Some households were issued special phones from Bell Canada that looked like regular Nortel phones with a yellow card reader attached to the side and a much larger screen. You could log in to your bank directly from the phone and transfer money out of your account into the card. You could also use an ATM if you didn't have the phone.

It was a pretty neat technology but at just around the same time Interac debit payments really started to take off and people were much happier to have a card linked to their accounts rather than a card with a balance you could lose. The payments were also pretty slow, so anyone paying for the bus slowed the line down.

I still have my card and reader somewhere and I think it has a few dollars left on it. The last time I looked, many years ago, the only transactions that showed up on the reader were coffee purchases at Tim Hortons.

In the mid 90's in Canada we had similar cards, but they were only for pay phones. Before cell phones became cheap, parents would buy these pre-loaded cards for their tweens and teens so they could call for a ride when they were done at the mall or whatever.

https://i.imgur.com/aD6ihh8.jpg

Personally, I did the collect call thing to my parents, especially after the system was automated.

Robot Voice: Hello, you have a local collect call from "mig39 is ready to be picked up" -- do you accept the charges? Then my parents would just hang up and come get me.

People of a certain age will remember the GEICO ad, "Collect call from Bob...Wehadababyitsaboy" - https://www.youtube.com/watch?v=9JxhTnWrKYs

There was also a "ewallet" card in France when I was a teenager, but it was mostly targeted at children and senior. Now I'm wondering if it was a true offline card or not.

Edit:

Can't find technical details on Wikipedia[0] but the fact that funds could be added online indicate it wasn't offline? I would love if someone here worked on it then.

[0] https://fr.wikipedia.org/wiki/Moneo

I'm surprised we don't have something like this in the U.S. Just last week I was withdrawing cash from an ATM because I was worried the power would be out for a few days and my debit card wouldn't work.

Almost-ubiquitous, almost-free network connectivity can be a curse when it comes to the development of resilient systems.

The US has had free local calling for many decades now, so online card authorizations were always much cheaper than in many other countries, even long before the internet.

Still, there were some applications: The article mentions laundromats, but as far as I know, US military ships have also had a similar system.

There’s an interesting recent legislation proposal today that argues for a very similar system, but primarily for the sake of privacy (although network/power failure resiliency would be nice secondary benefits): https://ecashact.us/

That's interesting. In Russia, cards didn't really catch up for a long time, but once they did, they were online cards with GSM-enabled card terminals.

Until 2010, most people will get their salary on a card, go to ATM, withdraw paper money and pay with that. Actually, cards only became relevant with the advent of contactless/NFC cards, which started around 2012. Then they spread like wildfire.

I wonder what caused the adoption of UzKart compared with plain old cash. I also wonder if any neighbouring countries had similar systems and what their adoption levels were.

> I wonder what caused the adoption of UzKart compared with plain old cash.

One of the main reasons to introduce UzKart was to force the "gray" economy back under the eye of the tax authority. So adoption was forced by the government by mandating paying a certain part of the salary to UzKart and limiting cash withdrawals.

That's super-interesting, thank you for sharing :)

Reminds me of minutes loading of SIMs in Philippines in the early 2000s... Loading was available every single tiny soda stand to bodega to major shopping - they were Uzbek-quitous :-)

I have some friend who have made millions over the years in selling international calling cards and routing them through their SIP networks...

There is the ability to make a completely separate transactional system outside of of Central Bank Control, using these stacks for card loading and calling (network access) etc... but generally fighting against Money Monopolies is suicide for your business.

And on the one hand, rightfully so - EXCEPT in cases like SBF... that guy is such a criminal, the central banks like him, and his parents, and his donations, and his fraud...

The whole system has holes in every facet.

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