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finance

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phil young

Cash is dying. In some places, it’s already dead

The end of money Phil Young PhD is an MBA professor and corporate education consultant and instructor

shift from concepts on PowerPoint slides The dream of a cashless society is already to something approaching reality raises a here, it just might not be on your doorstep. larger question. What determines the rate of Last year, during a trip to Copenhagen, adoption of new technology? The answer is I experienced it for myself. Even in the that old enemy of progress – incompatibility. most-connected, great cities of the world – Following my trip to Denmark, I visited London, New York, Paris – you can’t pay by Shanghai. To my surprise, I discovered that card at a street market. Not so in the Danish almost everyone was paying for goods and capital. In the four days that I was there, I services using a mobile phone, not cash. used plastic for every purchase – even at the As an American, I lacked the necessary Christmas fair. Street vendors are the final payment app but, noting that a few people frontier for cashlessness. Yet the Danes were were still using cards, I offered mine. The paying by card at the glühwein stall. trouble was, none of them worked. The The global march towards cashlessness, Mastercard, Visa and American Express and the differential experience of nations systems were not tied into the China that have tried to implement it, is worthy UnionPay network (I’m told this will change of deeper study. Necessity, as so often, very shortly). The ATM in the hotel accepted has been the mother of invention. The developing world – where many people own Mastercard and Visa, but it was out of order. The Chinese banks in the area had ATMs mobile phones but lack bank accounts – is only for the UnionPay network. I was forced a clear frontrunner. In Africa and Southeast for a few days to rely Asia, payment by mobile on the generosity of phone is common The developing colleagues to pick up practice. By contrast, the the tab. world’s tech leader – the world – where As an interesting US has been something many people own mobile aside, in China people of a laggard. Cards are phones but lack bank have been using two useful to have, but you accounts – is a clear main mobile payment can’t survive on them. platforms and apps: This is especially true frontrunner Alipay and WeChat if you want to buy Wallet. There is now a something for under $10 third option – Apple Pay. Apple has seized at the local store, where a sign demanding the enormous opportunity for mobile dirty cash will invariably confront you. payments in China by partnering with It is not that the world’s biggest UnionPay (yes, the same people who refused economy wasn’t aware of the coming my Mastercard or Visa). One has to question challenge. Way back in 2005, when I what the two Western bankcard giants were was teaching a course on the business doing while Apple made its deal with the of bankcards for MasterCard University, Chinese handler. Mastercard considered its biggest With the general acceptance of cards competitor to be cash (coins, currency and the growing use of mobile payments, and cheques) rather than the other card it seems that the world is on its way to companies. Thus, its goal at the time was becoming cashless, but with countries to increase the use of debit and credit cards evolving at different speeds. Scandinavia for the making of everyday payments, and China are getting there. In some of no matter how small. Moreover, mobile their larger cities, they have already arrived. payments were considered the next big Meantime, in the US, the trend is towards thing after cards to replace cash. Yet only less cash. But I’ll believe it is nearing now, over a decade later, is the move the finish line the day I no longer see a towards cashlessness finally gaining handwritten store sign that says: “We do not traction. The US has lumbered along while accept credit cards for charges under $10.” its peers have raced ahead. Main Street USA, not the European street The fact that it has taken mobile vendor, is now the final frontier. payments in the US about ten years to Q4 2017 Dialogue

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19/07/2017 10:17

Dialogue Q4 2017  
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