BARCELONA, Spain (AP) - A French whistleblower and Spanish anti-corruption activists are designing a digital payment system to exclude middlemen companies that make money from online purchases.
BARCELONA, Spain (AP) — A French whistleblower and Spanish anti-corruption activists are designing a digital payment system to exclude middlemen companies that make money from online purchases.
Herve Falciani and the Xnet group said Thursday that the peer-to-peer payment system would work like PayPal on a local basis within European cities for citizen payments to participating businesses and governments.
Falciani and Xnet said it will be nonprofit, with a pilot program in Italy starting in March. They said excluding online payment companies would mean savings for local consumers and businesses.
With a worldwide wave of corruption probes sparked by his leaks from HSBC bank ongoing, Falciani said the next step to rooting out financial crime was to "keep money local."
"There was a time for leaks, there was a time for politics, and now it is time for business," Falciani said at Xnet's grungy offices in downtown Barcelona.
Seen by Xnet and other activists as a brave crusader, in November a Swiss court convicted Falciani in absentia for economic espionage for leaking documents he acquired while working for HSBC from 2006-08. It sentenced him to five years in prison, but it appears unlikely he will serve time because France doesn't extradite its own citizens. Falciani had already won a case in Spain when arrested on a Swiss warrant after Spanish authorities argued he was cooperating with several European governments in tax evasion and money-laundering investigations.
Falciani is working with Xnet and other activists groups around Europe to create a payment system inspired by experimental digital currencies like Bitcoin. But they said this service will be used to exchange any currency, and it would be focused on local businesses, endorsed by city governments, and open to audits by citizens.
"Take the example of PayPal, which all passes through a bank in Luxembourg, or each time we pay with a credit card we are charged 3-5 percent... so billions of euros reach hands that shouldn't have this money," Falciani said. "Governments can't do anything to stop this because of European law, so it is up to us. This is our chance. If we don't take it over on a community level, it will all stay in the hands of the multinationals."
Xnet spokeswoman and co-founder Simona Levi said her group was providing much of the technical know-how to set up the open-source system.
Levi said that Xnet would soon begin talks with public administrations in Spain to try and win their support. Their hope is to roll out the service in Spain after it gets its start in Italy.
"If it works in one city, others will take notice," Levi said.
She added Xnet's new project would not distract it from its court activism.
Xnet revealed documents in 2014 alleging former IMF chief Rodrigo Rato abused a company credit card while working as chief executive of Spain's Bankia bank. Rato is now under investigation and his reputation has been ruined.