Nicole Kobie reveals why cash isn\u2019t dying \u2013 yet<\/strong><\/p><\/blockquote>\n <\/p>\n
You pay for bus journeys with a wave of a card, settle a dinner bill with friends via email, and haven\u2019t stepped foot into your bank\u2019s local branch in years. So why do you still have change jingling around your pocket and paper money clogging up your wallet?<\/p>\n
Is it time to kill cash? Many hope so. Leaders at Nasdaq, Visa and others have eyed up \u201cdigital dollars\u201d traded via blockchain \u2013 the digital ledger system behind Bitcoin \u2013 as a way of speeding up payments; Sweden\u2019s central bank is currently considering issuing a digital currency; and Barbados already has a version of its dollar based on the blockchain.<\/p>\n
But Richard Goold, partner and global head of Tech Law at Ernst & Young, doesn\u2019t believe we\u2019ll ditch the coins and paper soon. \u201cPeople have been predicting the death of cash for a very long time \u2013 well over 50 years,\u201d he said. \u201cAnd, credit cards, Bitcoin (and other cryptocurrencies) and fintech payment systems are giving rise to an increasingly common debate on the future of physical currencies.\u201d<\/p>\n
There are two ideas at the crux of the question. First, there\u2019s the currency itself, with cash no longer backed by gold but still a physical token of value. And then there\u2019s how we manage it, with more and more transactions making use of e-payment systems.<\/p>\n
Digital currencies<\/h5>\n
The arguments for digital currency are many: it could cut fraud, it\u2019s more transparent, and it\u2019s easier to use. But as old-fashioned as they seem, those round bits of metal and rectangles of paper have their benefits. \u201cCash is untraceable and easy to carry around, and it isn\u2019t only criminals and fraudsters who like these factors \u2013 the physiological link of having hard cash gives a sense of security that will be difficult to break for many,\u201d Goold said.<\/p>\n
Gareth Lodge, an analyst at Celent, has even bigger questions. \u201cThere are some questions around digital currencies,\u201d he said. \u201cWho backs it and how do you have the confidence and faith in that currency?\u201d It may be appealing to ditch government control of money, but consider who you\u2019re handing that power to instead. \u201cIt could leave itself open to all sorts of issues around being manipulated,\u201d Lodge added.<\/p>\n
Others disagree. People do like the security of physical objects, but many of us happily ditched paper books for ebook readers and paper letters for email, noted Amos Meiri, CEO of digital currency startup Colu. \u201cIt\u2019s the same with digital currencies \u2013 initially, they\u2019ll exist alongside standard paper currencies, but eventually they\u2019ll take over as their advantages become apparent and society demands it,\u201d he predicted.<\/p>\n
\u201cWe definitely view digital currencies as the future of payments,\u201d he said. \u201cIt may take a bit of time for people to adjust to the idea and let go of the concept of paper money, but years from now we\u2019ll look back and muse at the fact that we ever used something as untrackable and insecure as paper to record value.\u201d<\/p>\n
Meiri argues that the benefits of digital currencies outweigh the downsides. \u201cDigital currencies, especially those utilising the blockchain, provide security and visibility to the payment process, as well as a frictionless method that cuts out the middleman (and the fees paid to those institutions),\u201d he said.<\/p>\n
\u201cAside from this, an important benefit for currency issuers such as governments is that the use of all-digital currencies will greatly reduce the amount of black money on the market, on which no taxes are paid.\u201d People who get paid under the table now and then may disagree, but Meiri added: \u201cThe advantages are just so vast that there will be no turning back.\u201d<\/p>\n
Modern payments<\/h5>\n
Even if we don\u2019t ditch the dollar for Bitcoin, how we interact with money is becoming increasingly digital. Goold noted that \u201cthe use of cash will decline\u201d, but it\u2019s been falling for some time: physical cash makes up 45% of transactions, down from 64% in 2005, according to statistics from ATM operator Link.<\/p>\n
Lodge said that the way we move money around is likely more important to everyday users than how it\u2019s structurally organised and created. \u201cI think there are all sorts of opportunities around distributed ledger and blockchain technologies, particularly where the processes are complex already, so cross-border payments in particular,\u201d he said. Technologies such as blockchain could be used to guarantee and track payments, making it easier to both spend money and send it overseas, whether to buy a service from an Australian startup or a birthday gift for a distant niece.<\/p>\n
Money evolves slowly, but change is happening. \u201cWe talk about debit cards being, after cash, the largest payment type globally,\u201d Lodge said. \u201cBut it\u2019s an overnight success that\u2019s taken 40 years to get here.\u201d The same follows for PayPal, with Lodge pointing out that \u201c98% of it runs over existing payment channels anyway, and it has less than 10% market share, even now.\u201d<\/p>\n
\u201cTo move the needle on any of this is a long-term game,\u201d he explained. \u201cPeople\u2019s attitudes, and even just the practicalities of it, mean it won\u2019t happen overnight.\u201d<\/p>\n
There is space for rapid change in certain markets, though. \u201cI do think that banking for the \u2018unbanked\u2019 through fintech platforms and systems will have a big impact on parts of the world over the coming decade,\u201d explained Goold, referencing areas of the world where many people don\u2019t yet even have bank accounts. \u201cI also think that we will continue to see the inexorable rise of large technology companies increasingly having payment systems that challenge today\u2019s status quo.\u201d<\/p>\n
While digital-only banks and smartphone-based payment systems mean we may not need to carry paper cash in our pockets for much longer, we\u2019ll still be using the same currencies we know now in the years and decades to come \u2013 and you can take that prediction to the bank. Assuming you remember where your local branch actually is, of course.<\/p>\n
By: Nicole Kobie<\/strong>
\n28\/03\/2017
\nSource: www.pcauthority.com.au<\/a>","protected":false},"excerpt":{"rendered":"Will digital currencies and e-payments finally kill off the paper and coins we use for money? Nicole Kobie reveals why cash isn\u2019t dying \u2013 yet […]<\/p>\n","protected":false},"author":5,"featured_media":2286,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[13,12],"tags":[36,10],"class_list":["post-2282","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banca","category-medios-de-pago","tag-moneda-virtual","tag-pagos"],"acf":[],"yoast_head":"\n
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<\/p>\n