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John Candido - Black Cabs

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A post relating to this item from Finextra:

Dutch central bank comes down in favour of hard cash

28 June 2013  |  7608 views  |  3
Should we prepare ourselves for a cashless future? Not according to De Nederlandsche Bank (DNB), which is ready to ward off any large scale attempts by card schemes and retailers to abandon notes and ...

The future desirability of a Cashless Society

01 July 2013  |  7809 views  |  2

There is no stopping the evolution to a cashless society. It will be a convergence of the internet, credit and debit cards that have Visa PayWave & MasterCard PayPass, American Express cards that have ExpressPay, and a smart phone that can be used in much the same way as a physical wallet is used, only with virtual examples of credit or debit cards with PayWave, PayPass, or ExpressPay. These developments will eventually consign cash to history. Our smart phones will contain every debit and credit card we own, as well as our entire discount vouchers and purchase receipts in digital form. As a result, there will not be any need to carry any more bits of paper in our wallets. Google will produce a Google wallet, Visa will have an e-wallet, MasterCard, Square, and PayPass will all offer a similar product, as well. These products are called virtual wallets.

I don't think that plastic cards will be eliminated in future. When a power blackout or some other inevitable technical issue occurs, plastic cards can be imprinted mechanically with paper, or some other technology will be developed to record the transaction perfectly. Placing barcodes on all plastic cards that are read by a barcode reader that is powered by some other means that back-up a power failure could possibly perform this service.

I am absolutely confident that we are on the verge of a tipping point regarding the eventual elimination of cash from our economy. As long as there is a national regime of privacy legislation, the security and integrity of the internet is assured, powerful institutions such as state and federal governments will seek and obtain taxes in full in future. This will help to fund our treasury and help to pay for community infrastructure, the operation of federal and state departments, all government projects, and future policy developments. In addition, governments will not have to bear the cost of printing, manufacturing, storing, and transporting cash.

What I think will happen is that we will have a de facto cashless society first, where a majority of transactions will be done without cash, both in numbers of transactions and in the quantity of money involved. We will probably have a de facto cashless society in about 5 years. After a period of a further 30 to 40 years, or somewhere thereabouts, cash will be eliminated from our economy after the nation has had a plethora of free and wide-ranging debates about this issue.

It will be convenient not to have to ask for and carry any more paper receipts or physical discount vouchers, because they will be emailed to our mobile phones and personal computers. How incredible, powerful, and efficient will both Visa's, Google's, Square's and PayPass's virtual wallets be, once they become commonplace? Can the banking system adapt and catch-up? That is a rhetorical question. A cashless society is in every bank's financial interest to develop.

Police and intelligence agencies will advocate a cashless society in order to limit or prevent crimes associated with cash. Cash, including virtual currencies such as bitcoin, always provides criminal anonymity as in the drug trade, terrorism, burglaries, organised crime, illegal gun running, and cash thefts. The crime of counterfeiting money will be completely eliminated. The black economy is based on the criminal anonymity that cash allows. This will dissipate when physical cash is removed from society. An important part of the elimination of criminal anonymity in the future will be making emerging digital or virtual currencies illegal, or fully transparent and regulated.

A cashless society is one where greenhouse gasses are kept to a minimum. A society with cash is embedded to a polluting infrastructure. The manufacture of cash requires the transportation and use of raw materials in manufacturing processes, with the final product transported to financial institutions. Apart from the obvious risk to society from criminals, the transport of cash in security vans leads to greater air pollution in our communities. This is not counting people who desire to make either a deposit or withdrawal to their accounts throughout the nation on a daily basis.

A cashless society does not have to be the policy of any political party or government instrumentality. It does not have to be something that is forced on any nation that is not broadly accepting and ready for it. It should only be achieved after a plethora of wide-ranging national debate. It will broadly come of its own accord through technological evolution and development. The public will increasingly demand its security, integrity, and its many conveniences such as reduced queuing time for payments using payWave, PayPass, or ExpressPay, with a plastic card, mobile phone or with the use of Radio Frequency Identification (RFID).

Not only will a cashless society make paying at any retail point a quicker process, it will also make payment cues either shorter in length or non-existent. RFID, which stands for 'Radio Frequency Identification', will eliminate cues altogether. RFID will be adopted by supermarket chains in future. All that a customer has to do is to load up their trolley with what they want to purchase, and simply walk out to their car without going through any checkout process involving staff. RFID will accurately note what has been taken out of store by a specific customer, tally each item, charge the goods to the customer, and email a receipt to the customer's mobile phone or computer. Brilliant!

Banks and most businesses will want a cashless society because it will substantially lower their costs, by not having to deal with cash on a daily basis. There will not be any need to count, store, or transport cash. This will engender all banks and businesses to operate more safely and enjoy lower cost overheads as well. Mobile banking will have a profound impact on traditional banking with suburban branches in towns and cities.

All Australian banks and credit unions, together with the accounting firm KPMG, and the Reserve Bank of Australia (RBA) are working with the Australian Payments Clearing Association (APCA), in order to develop instantaneous transactions that can be executed 24 hours a day, 7 days a week, and 365 days a year. The APCA is an organisation that is helping to coordinate & develop a new and universal, digital payments system for Australia, which is called the 'New Payments Platform' (NPN). This new payment system is expected to be running at the end of 2016 or sometime during 2017.

There is one more significant reason that banks will eschew cash in future, and that is the threat to their customer base from significant businesses such as Facebook, Apple, Google, Microsoft, Amazon & PayPal, should they ignore the impact of the internet & mobile phone technologies. Each of these businesses has the means to quickly enter the financial & banking worlds and make a significant impact on most banks' business model. They have the technical skills and the requisite deep pockets to actualise all of this fairly quickly.

A mobile cashless society will be revolutionary, safer than cash, convenient, quicker to operate and unstoppable. In combination, all of these factors will prove irresistible for most if not all modern economies. They will prove fatal for the continued existence of cash, the more we move towards the future. A cashless society will provide a plethora of social and economic advantages, relative to a society that maintains cash in their economy. 

TagsMobile & onlinePayments

Comments: (6)

A Finextra member | 03 July, 2013, 11:25

haha, very funny:

We will probably have a de facto cashless society in about 5 years.

I reckon we'll be seeing a cashless society when the paperless office is ready :) Aint gonna happen in my lifetime.  My drug dealer, gun dealer, dodgy bookmaker, corrupt local politician, hard working sex worker and other associates all agree with me :)

 

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John Candido - Black Cabs - Melbourne | 03 July, 2013, 11:59

All of these paragons of virtue are in a thankful minority. As the majority rules a democratic society, you will see that the 'drug dealer, gun dealer, dodgy bookmaker, corrupt local politician, hard working sex worker and other associates' that all agree with you, will be outgunned in future by the sheer numbers of people who will far prefer a cashless society, than a society that harbours all of these fine and reputable citizens.  

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A Finextra member | 03 July, 2013, 16:03

Thank you. I'm smiling now and looking forward to 2018 when cash is gone, greenhouse gases are gone and people of ill virtue are also eradicated. It sounds like a wonderful place and so close too. The future is bright indeed.

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John Candido - Black Cabs - Melbourne | 03 July, 2013, 16:30

I don't see how a cashless society will perform magical feats of social engineering in perfecting human nature.  The elimination of criminal behaviour is an impossibility, unless you believe in the tooth fairy.  Crime, indentity theft and fraud are forever.  So will being human and making mistakes, regardless of whether or not there is a future evolution to a cashless society.  

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John Candido - Black Cabs - Melbourne | 16 May, 2014, 14:16

Here is someone else's thoughts on a future cashless society, and what actual components will drive us to a future without cash.

http://theconversation.com/a-cashless-society-and-the-five-forms-of-mobile-payment

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