Just How “Disruptive” IS Money 2.0?

The buzz is that the Limeys still love Liz.

Money, its a gas.
Grab that cash with both hands and make a stash.

Cash still king for customers (Finextra): God save the (portrait of) the Queen (on British banknotes).

Because Eurotourists are money.

One for The Numbers Guy to follow up on.

The headline here seems to suggest, for a fact, that payment technologies are not gaining traction.

But the story it headlines actually has essentially to do with a dispute over that question.

In which case a better headline would have been

Is cash still king for customers?

Unless, of course, you are ready to conclude that one side in the dispute is right.

The survey:

Note and coin payments accounted for more than half (54%) of all transactions last year, with £32 of every £100 spent in shops being in cash, according to a BRC survey which includes results from 10,000 shops responsible for over a third of total UK retail sales.

That is, the British Retailers Consortium:

These results reportedly defy payment-industry numbers:

But the retailers’ organisation is accusing card companies of exaggerating the extent to which cards have replaced cash, while pushing cashless payment methods as a way of boosting their own revenue.

Why? What numbers do the payment providers put up?
It would have also been useful to know whether the figure cited — 54% — represents a [putative] retreat or an advance, or a holding of its own, for carbon-based meatspace cash money over previous periods.

After all, we are told that cash is “still” king.

How kingly was it before?

How kingly is it now?

How long can it reasonably expect to avoid the revolutionary guillotine of payment tech?

On average a £20 cash transaction costs a retailer less than four pence while a £20 credit card transaction costs at least 17 pence, says the BRC.

Adding little actual value but charging an arm and a leg, the shopkeeps say:

The BRC says, in making moves to replace cash, card schemes and banks must acknowledge the very low costs they actually incur and reduce charges for processing these card payments to below those for handling cash.

And what do the payment providers says? Finextra just seems to be rewriting the press release — known in the business as a “he said, he said” story.

Easy to write up. Not especially informative to read.  Indeed, if you read the BRC’s press release, you see Finextra has pretty much cribbed selected paragraphs from the press release, leaving others out.

Which means that the “news item” — it runs in a section called “News” on the Web site — is actually less informative that the press release it cribs. The BRC notes, for example,

Since 2000 the Office of Fair Trading (OFT) has been investigating the so called interchange fees imposed by MasterCard and Visa. It is expected to rule next spring.  At the same time the European Commission is examining cross-border interchange fees and Competition Commissioner Neelie Kroes has already said that these fees are too high.

Helpful as context, but I still have a basic question: What numbers has the payment industry put up that these numbers call into question? That should not be too hard to find out, right?

Could be interesting as a case study in the rhetoric of the technological sublime.

And why do — or might — customers prefer cash?

Perhaps because of the perceived risk of security problems and processing errors with electronic transfers? (A topic that Finextra follows closely, if superficially.)

I know that certainly crosses my mind from time to time.

Just let me tell you about an e-transaction I have been trying — and failing — to get down through $&@#!! Citibank — “mortgaging your future without asking your permission” — for a couple of weeks now …

Paperless money makes an interesting case to consider alongside the putatively revolutionary potential of paperless voting, I think.

The buzz I hear is that that whole concept is something of a debacle.


Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s