31 July 2014

Beyond TEDIPAY

Alexander Peschkoff - TEDIPAY

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Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

Cash is king, but of which kingdom?..

09 June 2014  |  2087 views  |  2

It was interesting to see many Finextra readers defending cash. Most arguments in favour of cash are based on sentiments, rather than hard facts. The best authority on that subject, IMHO, is Dave Birch of Consult Hyperion. He wrote almost 150 blog posts on cash, citing or referencing mind-opening statistics and facts.

Attempting to sum up Dave's thought-through view on cash would be an injustice - there is more to it that meets the (casual) eye. Instead, I'll chip in with my layman comments on that matter.

Convenience
There are still some people who are saying that fumbling in your wallet for bits of paper and metal, and getting similar bits in return, is faster or better than being done in one second with a simple tap. I'd like to see those people putting cash into a machine to buy a paper transport ticket instead of using the likes of Oyster card...

If contactless interface - by law - was available at every retail point, and contactless cards were - by law - accepted for any transaction, 95% of population would stop using cash in less than a year. (Design of some contactless terminals does suck, but that is a different matter).

On a related note, what would happen if all prices were rounded (up and down) to the nearest five pence/cents? A self-sustainable miracle. Whilst we still have some psychological attachment to cash, we all hate coins... Once the coins are gone, legitimate use of cash will dwindle.

Privacy
Privacy my ass (pardon my French) - unless you are using Tor for browsing, know how to avoid CCTV cameras and never carry a mobile phone with you. There is no privacy anymore. Learn to live with it.

Ask yourself this simple question: who really benefits from cash. To help you with the answer, let me re-phrase that question: who will feel the pain if cash were to disappear tomorrow and replaced with its digital equivalent?.. 

Crime and tax evasion
Hands up (better still, please post your email address and mobile phone number here) those who regularly use €500 notes. And now those who firmly believe that 100% of taxi drivers, plumbers, builders and other "cash trade" merchants pay correct taxes. How many drug traders accept cards (I am not talking about marijuana vending machines)? Ditto.

Irrevocability
Cash really "shines" there. Especially when you bought a "lemon" and want to get your money back...

Underbanked
If you thought they need or benefit from cash, you were wrongTwice. Ask M-Pesa users about it.

Trust and reliability

  • Almost 3% of £1 coins are fake. 
  • Since "cleaning" dirty cash, in large amounts, is extremely hard, why not just keep those "proceeds" in cash? Why do people whose business depends on cash want to get rid of it?.. (The ousted Ukrainian president Yanukovich apparently fled with around $30bn (!) of looted money... in cash. Just think about the logistics of that move...)
  • If you keep £10,000 under your mattress, do you think your household insurance will cover it in case of fire or burglary?..

Are we done there?

 

TagsMobile & onlinePayments

Comments: (2)

Brett King - Moven - New York | 07 July, 2014, 03:29

Great article.

BK 

Richard Sanders - ACI Worldwide - Watford | 07 July, 2014, 14:45

There was a study by MasterCard last year that showed the number of germs on notes and coins which was scary. One of Dave Birch'sclassic lines (excuse the pun) is that all notes are tainted with cocaine anyway.

Why has no Supermarket introduced a contactless only till line?

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name

Alexander Peschkoff

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CEO

company name

TEDIPAY

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2012

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London

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I am the co-founder and CEO of TEDIPAY, the company that is bringing to the market a game-changin...

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