31 July 2014

Elizabeth Lumley

Elizabeth Lumley - Finextra

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Mo Money, Mo Problems

15 August 2012  |  3792 views  |  2

Does anyone remember the scene from season five of The Wire, when Proposition Joe starts laundering the money from the New Day Co-op drug cartel in an off-shore bank in Antilles? (If not, get the box set – we’ll talk in a few weeks).

Well, new cartel member, Marlo Standfield keeps asking Prop Joe where his money is; so Joe shows him a bank statement. That isn’t good enough for Marlo ‘My name is my name!’ Standfield. To trust that his money was safe, he needed to see the cash. So, a trip to the off-shore bank in Antilles is arranged for Marlo to look at his ‘cash’.

Anyway, this episode in the life of a fictional drug dealer reminded me of my parents (I WILL explain further) and resurrected an idea for a blog I’ve had for a while.

There have been a wave of videos paraded across our laptops, over the past few months, depicting bespectacled young men (all in skinny jeans) effortless drifting through their day - in hip, urban settings - paying for coffee, parking, buying tickets to some obscure South American lute player no one outside of the Lower East Side has ever heard of – without nary a rumpled dollar bill nor mishmash of coins ever ruining their sunny, Gen Y, home-brewed, sustainable, co-op day. (Not *that* kind of co-op…)

The lesson here is that cash is dead. The future is contactless, or mobile, or NFC, or corrective eye surgery or whatever. But the ‘lesson’ is stronger than that. It isn’t that cash is dead – it’s that it is ‘unfashionable’, passé, out of touch. Cash is not … where the ‘cool kids’ are.

The fact is cash is inefficient, easily lost, easily stolen, dirty… (Oh boy, you have no idea HOW dirty – it’s better being ignorant)… the list could go on and on.

But I’ve just got back from a holiday in America - visiting my parents (late 60s – both of them).

First, let me give you some background. My Dad has never used an ATM … ever. I have childhood memories of my Dad, coming home from ‘cashing his pay check’ - laying all the cash on the dining room table and putting the bills into little piles – mortgage, savings, credit cards, pocket money etc…Those piles were then given to my mother to deposit in the various accounts at the bank.

The way my Dad figured whether he could pay for various items – as he drifted through his day - was determined by how much physical cash was in his wallet at the time. He visibly flinches whenever I pay for anything with a plastic card.

That need to physically see, exactly how much money you have (or don’t have) runs deeper than is publicised. Deeper still is the public’s connection with their bank – the so-called keepers of their money.  The mentality that your money is locked in a safe at the back of the First Union Bank of Schenectady at 100 Main Street has been argued against ever since George Bailey screamed “you’ve got this place all wrong, see, your money isn’t back in a safe…” 66 years ago. (What is it with me and fictional characters?)

Similar to this need to see the cash, is this connection to the branch. Let’s move on to my mother – who fares marginally better than my Dad as having actually used an ATM and regularly uses her bank’s online service. We both needed cash (see ‘flinching’ comment above). I drove us to a Bank of America ATM (the only ATM in my hometown that accepts my British Barclaycard – that is a whole separate blog). I then had to drive my mother, across town, to her bank branch because “They say, you should only use the ATM at your bank branch…”

“Really Mom, really!, who’s *they*, who is THEY?...Seriously, you take my brother’s word on how to best transport blueberries up and down the East Coast as gospel, but you don’t listen to your daughter on how banking networks work!??” (Sorry, just reverted to being 14 years old for a second…that really is a whole separate blog)

Anyway, my mother wanted to use the ATM at her bank branch, not because it is safer, but because it feels safer – to her. I’m not quite sure we as an industry can dismiss that type of customer behaviour as passé or ‘out of touch’. The patron saint of innovation, Steve Jobs, made a fortune selling products that ‘felt’ better, rather than actually being better.

Customers lost trust with banks, for a wide variety of reasons over the past few years. But maybe one of the reasons was because banks moved farther and farther away from letting customers see their money. Letting them know that the ‘vault at the back of the bank’ is really the established network of payments infrastructures, mortgages processing, regulatory compliance etc....

I once sat at a conference where a ‘banker’ spoke about how their mobile balance checking service was very popular with their ‘working class clients’. Seriously, I don’t know many people who drift through their day without thinking, at least once: “I wonder if I can really afford that Grande, de cafe, chai latte with extra whipped cream?” Why would ‘checking your balance’ only be popular with some mythical ‘working class’ client? Is there data on this? Or is it some dismissive ‘out of touch’ banker assuming it is? (Answers on a postcard, please)

We’re seeing pockets of change. US bank services start-up, Simple, have written about their planned service to allow customers to not just see their current balance, but to see the amount of cash actually available to them – taking account of standing orders and direct debits. MasterCard offers a display option on some regional cards which shows customers the amount of credit they have left.

The future of money may not actually be cashless – but instead a better and closer relationship with our cash and a better understanding on how banks ‘keep it safe’. That process needs better service and better communication from the banks. Because for every hip young urbanite buying tickets to ‘An evening of Charango music’ on his iPhone is a 68 year old man trying to pay for parking at an automated machine with a Dunkin’ Donuts loyalty card. 

(None of whom are Marlo Standfield, I really need to be clear on this)

None are Marlo Standfield I really need to be clear on this TagsPaymentsRetail banking

Comments: (3)

John Dring - Intel Network Services - Swindon | 20 August, 2012, 13:32

So many visualisations in this funny story :))  And a lot of truisms.  But there are obviously huge variations across the masses - how else would stuff that I think is bonkers be the 'next big thing' seemingly overnight.  There really is room for all manners of paying for stuff - hence the plethora of standards.  Everyone wants everything to work everywhere (ubiquity, like SMS), but it boils down to what is easy and what you are comfortable using (I mean if I could pay my parking with a Dunkin' Donut card, I probably would!  Maybe there's an idea) 

Elizabeth Lumley - Finextra - London | 20 August, 2012, 13:42

Ha! As soon as I wrote this I thought "...someone is going to argue 'why can't you pay for parking with a Dunkin' Donuts card? After all, all it is is a pre-paid card...'"

A coffee regular, cup of Munchkins and 45 minutes at the parking meter please! :-)

David Birch - Digital Money Forum - London | 22 August, 2012, 17:23

Marlo Stanfield: That's my money. 
Omar: Man, money ain't got no owners, only spenders 

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name

Elizabeth Lumley

job title

Multimedia and Special Projects Editor

company name

Finextra

member since

2009

location

London

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I am the multimedia and special projects editor at Finextra.

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