Digital divide: e-money

Illustration: Harry Campbell (source)

I have been recently thinking about how the digital revolution is having an impact on the older generation. I made some sweeping statements about how some over 70s are unwilling to use technology and can be left behind… but this is, of course, true of the younger generations too. There are equally some incredibly tech savvy octogenarians I’m sure.  I had a discussion with a relative, aged 69 and his impression was that with all the changes in technology, there will always be a need for hard currency; cash, coin, loot, stash, bread, smackers and samoleons.

I pointed at the apps on my ‘phone and watch and even the RFID contactless payment on my credit card. “Nope. Take it from me, lad. They’ll always be hard currency. The places I worked in would never accept a contactless payment and those phone apps never seem to work. You can’t beat hard cash.” Is this true or a generational wall that is more to do with digital naivety than what people are willing to do or use?

For example; many of the eating places I visited in Amsterdam last Autumn didn’t accept cash. It was card only and there were advantages that were immediately obvious. No cash till (no robbery?), the bar/cafe only needed a terminal, no print-out receipt (sent by email), no need to give change (or leave a cash tip) and therefore no fraud in terms of tax or pocketing the profits. It all seemed to work really efficiently to me. There is always a risk with plastic, it could be stolen or data skimmed. Advances with RFID and mobile phone payments will hopefully address these.

Money and economics are such abstract concepts, perhaps he was suggesting that people prefer the surety of physical money? I am and have always been suspicious of Bitcoin for example; it seems to me a manifestation of the underworld in some way! What is money actually for?

It’s a store of value, meaning that money allows you to defer consumption until a later date.

It’s a unit of account, meaning that it allows you to assign a value to different goods without having to compare them. So instead of saying that a Rolex watch is worth six cows, you can just say it (or the cows) cost $10 000.

And it’s a medium of exchange—an easy and efficient way for you and me and others to trade goods and services with one another.

James Surowiecki History of Money, 2012

And economics? Even more abstract a concept… I would refer you to The Capitalist Creed chapter in Yuval Noah Harari’s Sapiens (2014) as a great explainer that money doesn’t really exist. Mind-blowing stuff.

In the future, maybe we will have a society that doesn’t require the exchange of goods in the same way and we might have some other form of bartering value? If the technology of smart phones are an alternative to cash then the enabling technology has already arrived, and it’s taking hold because business drivers (that is, the high cost of cash) and  social drivers (cash’s disproportionate cost to the poor) were already there. And just as the plastic card and the Web made it easy for us to pay merchants, the mobile phone will soon make it easy for us to pay each other¹.

That’s assuming that there isn’t a global climate crisis or some otherwise disaster that renders all money useless. How would the mega rich pay their security staff? Protect their assets etc. Back to gold bars?! Oil?


¹ Let a Thousand Currencies Bloom (2012) David G.W. Birch



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