instead we have rising levels of cash in the economy
[From The FinanSer: But cash is better than cashless]
I don’t think that’s true, or at least true everywhere. In Iceland, 93% of all retail transactions are non-cash. Recent data by the Bank of Japan showed that the number of coins in circulation dropped 0.25 percent to ¥91.45 billion in June, the largest year-on-year decline ever, due largely to the spread of e-money. In Hong Kong, the Octopus transit card has replaced 1% of the cash in circulation. In Singapore, the government has been considering Singapore Electronic Legal Tender (SELT). In Japan, unlike all other developed countries, the number of coins in circulation has started to fall (because of mobile phone-based payments). In Kenya, the new mobile payment system M-PESA has more than a million customers. In the UK, debit cards have overtaken credit cards and cheques will certainly vanish in our lifetimes. It seems as if the trend toward electronic payments is accelerating around the world.
How far will this trend go? Since the social cost of cash is high, and the associated transaction costs fall disproportionately on the poor, we might all be better off once the shift to e-paymemnt (m-payment, actually, for most people in most of the world) is complete. But we need to explore to be sure: there are some aspects of cash (such as anonymity) that are valued and we need to understand how and why some characteristics might need to be preserved. Is a cashless economy realistic? Or desirable? How might such an economy emerge and is it possible to imagine the impact of the end of notes and coins?
I’m going to be presenting on this topic at the London Futures Symposium on 18th April at the invitation of the European Futures Observatory. I’ve never presented at one of their events before so I’m really looking forward to meeting the folks there and hearing some ideas from them too.
You can come along and hear some of these ideas too! The kind people at the European Futures Observatory have kindly agreed to let me offer free delegate pass to this event — worth an amazing ONE HUNDRED AND TWENTY FIVE of your English pounds (plus VAT) — as a blog prize. So here we go: if you will be in London on April 18th 2008 and you would like to come along, all you have to do is be the first person to reply to this thread with the name of the London Olympics 2012 financial services partner who announced a contactless payments roll out this week.
In the traditional fashion, this competition is open to all except for employees of Consult Hyperion and members of my immediate family. Oh, and no-one can win more than one of the Digital Money Blog prizes per calendar year.
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]