Silly money: Before you chuck your chequebook away, triple-check that super-handy digital coin

..the biggest of payments problems...

I'm very happy to have my mobile and my money kept separate! Especially given the ease with which they can be nicked, explode or dropped down the toilet....

Money like cheap balloons...

or Cheap walkmans, smartphones or [insert favourite device or toy that broke moments after taking ownership].

I find doing all my transactions on my debit card easier, but I do feel guilty as I know, the more that do this, the sooner cash will be a thing of the past (there are some convenience advantages to cash - just as there were for cheques).

Bullion's where it's at

I was chatting with my pal over a beer at the weekend and we think we're going to start dabbling in sovereigns and bullion. Keeps it under the radar, and in years to come will always be able to sell for hard cash.

Just got to make sure it's kept secure.

This is all because the West is far behind

It seems to me that this panic is all because FB etc can see the existing success of AliPay and WeChat Pay in China, with their QR-based systems. This is in and working and IIRC processes something like 1.5Bn transactions/month - and all with no transaction fees for the punters. By all reports, paying by phone in China is becoming a default, even in more isolated areas.

If the Chinese providers can expand into the rest of the world, then that takes all those lovely transactions (and tie-in) away from the Western platforms and providers - not to mention the credit card companies.

Those nice people in FB can see how much capture the Chinese operators have in their own markets, so obviously would love to have that kind of tie-in of their own customers/users. I doubt Google, MS et al will be far behind. And as one of the commentards pointed out: soon we'll also have Goldman Sachs and their ilk trying to muscle in as well.

I like proper cash

Quick, convenient, accepted by everyone.

It works when phone lines are down, banks / visa etc. are throwing a wobbly.

I know plenty of places that don't accept cards (e.g. one of my favourite pubs - proper pub, no meals (just snacks such as crisps, nuts, pickled egg, pork scratching or other available snack) and local greengrocer (average purchases not enough to make cards cost effective so cash is the only option) and lots of small places that do cards but set minimum amount typically at a tenner (else it kills their profits if you do small payments on cards as small shops pay far more per transaction than the Tescos etc. of the retail world who get less of a hit from tiny card purchases).

Additional benefits include no tracking of your shopping (say no to store cards too folks).

I do have a card - its main use is making cash withdrawals.

Paradigm shift

It's not that long ago that we wrote cheques by hand. It's not that long ago that we were having our VISA cards pushed through a machine to create an invoice to sign. It's not that long ago that we ran them through a machine to create a digital transaction. It's not that long ago that we press them against something for small amounts of money to create the transaction. It's not that long ago that we could add these cards to our smartphones and bop that against somerthing to make the same payment.

The Cryptocurrency change is happening, it reminds me of the beginnging of the internet where simple creation of digital information and transactions created a shitstorm of terrible websites and services. A few rise to the top and create something that is so intuitive and convenient and obvious that we all start using it and wonder how we lived without it. Crypto will make currency decentralised, as the internet made information and services decentralised. Some of these will become the De Facto way to store wealth and make international payments. That's why the centralised banks and governments are starting to worry. Think about why you trust a bank with your money. Think about why banks were invented. Think about why money was invented. The cream will rise and it won't be this generation that accepts it. It will be the next generation, because for them, it will be the norm.

It's more expensive to take gold into space than it is to send bitcoin.

Developing world?

particularly in the developing world, where bank accounts are rare but smartphones plentiful.

I was recently talked into doing a bit of pro bono work to help someone in Tanzania set up a website to sell teaching materials. The interesting thing of course is that a lot of people there don't actually have smartphones (too pricey) but they do have feature-phones. And their way of transferring money electronically (in the absence of bank accounts) is to send credit between phones. I think the main system used is called Mpesa (M for mobile, pesa is Swahili for money), but there are others. That launched back in 2007. Nice, simple way to pay a bill, with real currencies. Strange it hasn't caught on in Europe/USA

I don't get the disconnect between money and mobiles - AFAIK most European countries have various apps that do that, sometimes linked to the domestic electronic payment system. However, they do not seem to travel.

I do not have any personal experience as I trust cards and cash more than anything on a phone.

In most countries it will be a long time --

-- before wave-n-pay phonecoin replaces everything else.

I mean, if I so choose, I can still pay for stuff the same way Samuel Johnson did, with little bits of officially-minted metal. Or with paper. Or with a different kind of paper, which I have to write on first and sign. Or with a debit card, or a credit card. And some places I could wave-n-pay.

The point is, though, all these ways coexist now because people have different ideas about the symbol-system we call money. And that variety of ideas means that a canny capitalist organization will keep on taking different forms of payment in order to maximize opportunities to sell stuff.

Backwards compatibility will be very, very slow to disappear. And that's assuming the global financial system continues working as we expect it to. Otherwise we'll be back to bartering animal hides for barley.

Why different currency units?

The point I see many missing in this sort of debate is that the payment medium doesn't necessarily dictate the currency used. I can purchase stuff digitally with my credit card, or I can use Paypal which is linked to my credit card. Or I could pay for something with cash or check (cheque). All my expenditures, since I'm in the USA, are in US dollars.

I don't see a lot of difference how you pay as long as you're paying something we can all agree is actual "money," like dollars, pounds sterling or euros. What possible need is there for this "fake money" crytocurrency? What does it do for people (other than crooks like ransomware thieves) that regular money doesn't manage to do? Why does this bogus "currency' even exist? What purpose does it serve, what benefit does it convey that "real" money does not?

Bah!

Suffered a severe pull in my abdominal muscles laughing when I read "seamlessly".

Very poorly conceived article.

The author fails to distinguish between payments systems and digital currencies.

They can be combined, but are 2 very different affairs.

Payment systems have a niche: better convenience and/or lower cost vs. credit cards. It isn't at all clear to me that it is all that large; if Discover and Amex have to bite and claw to survive, how do smaller organizations manage?

Digital currencies, on the other hand, have no future. Not because of the technology, but because the existence of any international digital currency, in any significant scale, destroys sovereign governments' ability to tax and to print money (taxation through devaluation).

That isn't going to ever happen.

3rd world countries with unstable currencies use a lot of USD or Euro, but that's cash which is really tough to stop.

A digital currency, on the other hand, isn't. Outlawing it makes the telcos, the retail stores, the banks - the entire institutional side of the financial ecosystem - against the digital currency.

The primary reason it hasn't happened yet in the US and Europe is two-fold:

1) the amount of value in the digital currency ecosystem (cryptocurrency et al) is so small as to be laughable, compared to the overall financial ecosystem and

2) The US and EU were beneficiaries in illegal capital flight from East Asia, where hot money flows are heavily regulated.

And they called me paranoid...

For never allowing online services like Google have my cell phone number, and because anything I buy online I pay in cash only.

I don't even use online banking and every time someone at the bank I use asks, I just mention the latest hack that happened.

But! Integration!

I can hardly wait for the day when every one of the dozen sites that I have to subscribe to just to watch movies or TV also insist that they be paid with their own bespoke e-currency. Wanna bet that Apple is first in line?

Beware of coin

I have been involved in then setup of a crypto exchange, and as part of that you get to meet lots of other people in that sphere.

My background is institutional finance and compliance, and let me tell you, it will take a decade or more before any of them are even remotely ready for interfacing with the real world. They're all busy building their own bubble, and reality only intrudes when they have to interface with the real world and do awkward things such as paying bills and execute KYC and AML on incoming payments.

Operators of these outfits seem to come in two guises: those that made money with crypto mining (and lost buckets when the market collapsed) and thus think that the world just throws money at them without having to develop any real business competency, and those who are good at making investors think it's the Next Big Thing and they better get in quick (those would be the ones actually justified in thinking that the world just throws money at them).

Both variants appear to share a particularly aggressive aversion to sane operations, security and compliance. The most interesting example was an exchange who brought in a new personnel manager who proceeded to replace well qualified people in compliance and operations with, well, idiots from the gaming world who would not last two seconds in the reviews they needed to attract the Big Money, yet all of them think they will be a gazillionaire in a few months.

There is no idea of process or how to even GET to a framework with policies and processes, there is a nigh hatred of traditional finance because it's "dumb" and "they are the new world", there are no provisions in their designs for monitoring, audit and security (cold storage is only an answer until someone walks off with it - not uncommon) and there is not even the interest in changing any of it.

Trust me, you should not trust most of those exchanges with an old sandwich, let alone with your money.

As for Libra, if it is tied to a fiat currency then it's just a currency with a different name - basically IOU vouchers, which is by some degree of irony how banknotes started in the first place. Ah, the sheer innovation of it all..

Cashless camping

We're currently pitched up on a campsite in France where everything is cashless either using their own pre pay system which is a small card attached to your wristband or normal cards. Which is better than trying to stash cash in your budgie smugglers.

No cash option?

From time to time there are stories where a bank system goes down and entire chains of stores are hit with no way to process digital payments. Tesco got clobbered once by not being able to take card payments for about a day which cost them loads of money. I seem to recall they also had a problem once with their tills being online and a server error left them with no way to ring up purchases.

A pub on a Friday night would hate for their connection to go rotten and not be set up to take cash. If you are a business, your goal is to be able to take customers money any way that is reasonable to manage. If the profit on a sale is less than the transaction fee, it's right and proper to post a minimum to use something other than cash. Unless all the pubs in the area stop accepting cash, yours will be the one with the most available seats on a weekend.

Way back when I worked at a bar, you could use a card, but you had to buy in for at least $20 and received tokens (non-refundable) to use for purchases. This was before tills were all wired in and three bartenders and all of the waitresses (yes, they were all girls at the time) had to use just one CC reader. It took too much time to take plastic for each transaction. The bartenders could pour 3x as many drinks by not having to turn around and fiddle with the machine each time. Even if their cash count was off a bit at the end of the night, the business was far better off for not performing a card transaction for each order. The place had a bounty for a perfect drawer. If your count was spot on, you got at least a tenner or much more depending on your total sales for the shift.

Cash works in many places. I'm still waiting on EV chargers to be available with cash if they are sited at a forecourt or adjacent to a business. It's a backup for when (not if) the network is down and it's good for the local business as it makes you go inside where you may purchase stuff with big margins like a fizzy drink or crisps.

Surprised

.. That 7up should be so finacially nieve.

In Thailand that are basically a finacially services company. Every branch has an ATM, it's the easiest place to pay your various electricity, water and phone bills. They accept all credit cards plus Apple Pay, and a couple Thailand only Android pay services.

then spend big at 7-Eleven

"it didn't take a criminal mastermind to divert accounts, empty their contents, then spend big at 7-Eleven."

7-11 must be different in Japan then the US.

Other than a 6 pack it's hard to find anything that costs more than 10.

You'd need to empty the store to spend more than 1000.

Currency must be based on TRUST - Facebook???

The prospect of Facebook holding a record of many / most / all of my financial transactions and selling that data to whatever buyer is prepared to pay them for it is more than enought to put me off this particular initiative.

And blockchain technology, although it has been "in development", and even limited real use for years, has yet to prove it is needed for, and capable of supporting electronic transactions on a global scale (and the Bitcoin manifestation of it is an environmental disaster).