Payment Methods Never Die, and May Not Fade Away

by George Peabody 0

In its recent “The Future of Money in a Mobile Age” report,the Pew Internet and American Life Project has released a strongcompilation of data sources as well as the results of its ownsurvey of technologists on the future of money in these days ofmobile devices. It’s well worth the read.

In the opinion of these experts, and we agree, cash and cards willstill be with us in a decade. So, for financial institutions,merchants, the Fed, and consumers, folding money will still be atool for exchanging value. The important question has far more todo with the volume each method enjoys and there is no question theconvenience of electronic exchange will continue its paper-killingdrive.

But extinction for paper is still a long way out. Paper, especiallycash, will continue its appeal for those who deeply mistrust thetraceability of electronic transactions, poorer consumers withlimited access to electronic means of value exchange and, ofcourse, criminals. As author David Wolman pointed out in his usefuland entertaining 2012 book “The End of Money: Counterfeiters,Preachers, Techies, Dreamers – and The Coming Cashless Society”cash is a criminal organization’s best friend.

As the ability to transact via smart device expands, an implicationfor developed economies then is the potential growth of regionalpreferences for particular methods of exchange. In the U.S., forexample, the Deep South is poorer, more deeply religious, andconservative, characteristics that will tend towards favoring cashand check transactions at a rate higher than either coast, forexample. For many in this region, cash is both the trusted means ofexchange and, too often, the only method available. This hasimplications for payment service providers, merchants, governmententities, and financial institutions as they plan for merchantacquiring, terminal deployments, card issuance, app usage, andmore.