digital clearinghouse idea

I am a crypto-novice, so perhaps you can develop these ideas better. But, 
here goes.

Right now, if you want an anonymous transaction done and a small amount of 
money is involved, you
can go down to a bank or Seven Eleven and purchase a money order for cash. 
You mail the money
order, and it is very hard for anyone to find out who you are. The money 
order has introduced
anonymity between you and the payee. My concept is similar, but it would 
seem that any such concept
must work with your existing checking accounts, to be useful today.

So, to establish an ecash digital clearinghouse, how about the following:

1. Set up an Ecash Clearinghouse (ECH) in bank secrecy haven, such as 
Bahamas, Liechtenstein, etc.
2. Subscribers to ECH pay $2/month plus small transaction charge (say 
$.15/transaction)
3. Each subscriber authorizes his bank to accept electronic checks from ECH 
as debits to his account.
   Electronic checks are currently handled by the U.S. banking system as 
Automatic Clearinghouse
   transactions, and are used by organizations such as Checkfree(tm) and by 
insurance companies
   to automatically take money out of your account each month for premiums, etc.
3. Ecash is emailed to ECH.
4. ECH issues an electronic debit to payor's account. This debit clears, so 
now the money is in the
   account of the ECH.
5. ECH issues an electronic payment to the payee's account. This electronic 
payment is from the ECH,
   with the ecash number as the "backup" for the transaction.
6. Now everyone has gotten paid.

Weaknesses perhaps you can address: the ECH "knows" who is the payor and 
payee for each transaction.
Similar to anon.penet.fi, in that there _is_ a list somewhere which could be 
seized and use
to reconstruct the transactions, e. g. for "law enforcement" purposes.

Perhaps ECH subscribers could open an ECH account as a "numbered" account, 
but even so, since the
ECH would have each subscribers' regular checking account number, this 
wouldn't be much
protection. Without the ECH knowing your checking account number, ecash 
isn't convenient.

Any ideas?
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Electronic checks are currently handled by the U.S. banking
      system as Automatic Clearinghouse transactions, and are used by
      organizations such as Checkfree(tm) and by insurance companies
      to automatically take money out of your account each month for
      premiums, etc

If you use the ACH system, you can't pre-authorize sporadic payments
for arbitrary amounts.  Since the receiving institution enters the
transaction into the ACH, and since the security environment of the
ACH is, er, primitive to what can be accomplished with public key
techniques, each transaction amount must be specifically authorized
with a piece of paper.  Individual transactions can be authorized, as
well as periodic payments such as loans and insurance premiums.

With Checkfree, the sender must separately authorize each payment, as
I understand it.  The receiving institution cannot ask for payment.

It's a hole in the payments system--an electronic way for individuals
to give authorization to take money from their accounts on a per
transaction basis.

Eric

Date: Sun, 29 May 94 18:40:48 -0700
   From: hughes@ah.com (Eric Hughes)

   If you use the ACH system, you can't pre-authorize sporadic payments
   for arbitrary amounts.

I talked to both Fidelity Checks and Checks-By-Phone, and both of them
said that they would accept electronic mail as evidence of
authorization.

They work as alternatives to credit cards.  When a customer calls you
up, you tell them that you can accept a check over the phone.  They
read you the check number, account number, and routing code.  You
submit that information to them by modem and they print up the checks
and overnight them to you.  Fidelity Checks charges $200 startup fee
plus $2.50 per check.  Checks-By-Phone charges $350 startup fee plus
$2.00 per check.

They both contend that this a standard way to buy things and that
customers accept it.  Personally, I've *never* had a vendor suggest
that they could write a check on my account.

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