Why a US dollar and a Euro are roughly the same value.

A US dollar and a Euro are roughly the same value: 1 USD is about 1 EUR, very roughly (rather than, say, 1 USD = 1000 ITL = 10^25 ZWD = 60 RUR).

There is history behind that which I've not seen presented in one place. Here is my vague understanding of it.

For a few decades before the early 1970s, the Bretton Woods system fixed USD and gold (at $35 = 1oz) and many other currencies were pegged to gold/USD.

This ended in 1971, when the USD would no longer freely converted into gold by the US government, and major world currencies became free floating.

Around that time, although at little bit before, the IMF Special Drawing Right came into existence. This was defined, at the start, to equal 1 USD, which it did until the end of Bretton Woods, but it wa. The only time I've really encountered this in real life was in small print on the back of aeroplane tickets, where compensation amounts were denominated in SDRs.

The SDR was composed of a basket of different world currencies (at time of writing, USD, EUR, CNY, JPY, GBP in defined ratios) so as the USD-value of those component currencies change, so does the USD-value of 1 SDR, rather than being fixed to the initial 1 SDR = 1 USD ratio. Over time, though, the exchange rate has stayed very roughly 1:1

In Europe, they invented the European Unit of Account which was a basket of specifically European currencies. This was scaled so that at the start, 1 unit of account was equal to 1 SDR (and so inherited the property of being roughly 1 USD). Being composed of a different based from the SDR, it varied in value with respect to both the SDR and the USD.

Next came the ECU (which was invented just before I was born), another basket of European currencies which replaced the European unit of account at 1:1

Finally, along came the Euro, an actual currency with paper notes and metal coins. This replaced the ECU again at 1:1, but again was a different basket: While the ECU basket had included GBP (British pounds), DKK (Danish crowns) and GRD (Greek Drachmas), the Euro did not include those.

So the Euro has the US dollar as its great-great-grandfather through a series of basket currencies, each branched from the previous at a 1:1 ratio.

Of course, all that 1:1 substition could have gone very differently: the Zimbabwe dollar was equivalent to a Rhodesian Dollar which was equivalent to half a Rhodesian Pound (as happened with most pound decimalisations) which replaced the Rhodesia and Nyasaland pound which replaced the Southern Rhodesian Pound, equivalent to a pound sterling - but the GBP:ZWD exchange rate at the very end was something like 1:10^25.

Payment Wristband on the London Underground

I previously blogged about making a paytag sticker into a wristband. Later Barclays Bank released a variation: bpay, a prepay mastercard already in a wristband.

The wristband holder is pretty shitty and falloffable: it is bulky and I know two people (one being myself) who have lost their bands accidentally. I've rehoused mine on a woven bracelet.

Being a pre-pay band, this chip does an online authorisation for every transaction, making it sometimes a little slower. But for the same reason, they expose authorisations (not just cleared transactions) in their live online statement.

I recently made my first journey on the London Overground using bpay (I've been on their contactless payment trial for 6 months but using a different card) and I got to see an initial authorisation that I hadn't seen before with my previous (post-paid) card:

0908 Enter train system at Wapping station

0915 bpay sees this authorization:

     Auth: TfL Travel Charge,TFL.gov.uk/CP,GB  29/09/2014  9:14:50  Posted On: 29/09/2014  GBP 0.10

0922 Leave train system at Shoreditch High Street

then around close of business on day+1, that Auth gets replaced with the actual charge:

    Fin: TFL.GOV.UK/CP,VICTORIA,TFL TRAVEL C   30/09/2014  18:07:58  Posted On: 29/09/2014  GBP 7.20

Interesting that they charge 10p for authorization rather than the minimum single fare. Also note that the description of the transaction changes (to something less readable, IMO) - that seems to happen from other merchants too. Weirdos.

paytag wristband

A year or so ago, one of my credit cards sent me a PayTag: a sticker with the contactless payment bits of a regular credit card, but without the other stuff (contact chip, embossed number, etc).

Their stated usecase was for sticking on your phone, as a sort-of low tech upgrade for phones which don't have NFC.

I didn't find that use case particularly compelling, and aside from comedy ideas like putting it inside a fairy-wand, I've been waiting for a use.

A few days ago I made it into a payment wristband. My right-hand wrist has loads of bracelets on it already, and I took one of those, some plastic packaging and some superglue and made a payment wristband.

I was a little wary at deploying this in use at first. My initial test was deliberately in a stationer's shop which had unattended self-checkout terminals. (I've used that same branch for RFID fun as a teenager in the past, where I had a anti-shoplifting coil in my pocket and set the alarms off every weekend). For 75p I ended up with a new card case and a successful initial test.

Next I went to Waitrose to buy my groceries. I was wary here because the daytime staff are angry dinner ladies who have confiscated stuff off me in the past(!). They didn't seem to bat an eyelid at me waving my jacket arm at their payment terminal.

Thirdly I went to buy coffee. This was more awkward. Their payment terminal was stuff under a shelf and looked like it was probably quite awkward to use even with a regular contactless card. The dude was a bit confused at me putting my empty hand towards him and waving.

My final test was in a pub. The contactless user experience is a bit different in most pubs: they use hand-held terminals and usually you hand over your card, they notice it is contactless and then use that. So I had to work around that a bit. I handed over my regular payment card and when he noticed it was contactless and went to swipe I drunkenly shouted "WAIT! LET ME USE MY WRIST!" which he did. At that point the card reader decided it needed to do dialup verification so there was a tense few seconds where I hoped I didn't look like a knob. But it worked.

I'm surprised at how unsurprised staff are at seeing this. I need to figure out the right way to start a contactless payment in a hand-held reader environment. I'm looking forward to being able to use this on the London Underground ticket gates later in the year too...

later: someone sent me this article about a contactless payment suit.