The prospects of cash and electronic money
By Ahmed Noushad
Tech is a trend. Tech is a symbol of mordenisation. Tech signifies a country’s development prospects and it essentially determines the social and economic status of individual. The more techs you dwell in, the higher you are in social aspects. We involve in various forms of technology to make our life easier, some might say even more balanced. There are controversies to this statement, but science has developed things to make things easier and efficient in the first place. But when science started to make an innovation that replaces, everything falls in questions.
Money itself is an ancient technology that perhaps made life easier and more measured. So much measured that we even indulge God in to this measurement by saying ‘God will measure every penny we spent’. Although lifestyle was all about bartering things in the history, the introduction of the concept of money has put everything in to measurement, making life more accountable and measured. At least it was material or partly material as of today, but science has even bigger plan, which is the total replacement of material money with electronic money. Wolman, a contributing editor at Wired magazine, writes: ‘Although predictions about the end of cash are as old as credit cards, a number of developments are ganging up on paper and metal money like never before: mistrust of national currencies, novel payment tools, anxiety about government debt, the triumph of mobile phones, the rise of virtual and alternative currencies, environmental concerns, and a wave of evidence showing that physical money is the most harmful to the billions of people who have so little of it’. This is supportive to the scenarios we have here in Bangladesh. How safe would you be to walk around with cash? The transaction hours of Banks are always on the office schedule, and Banks are closed on weekends, leaving us in the mercy of night to walk with material money. It is only obvious that a piece of plastic would look safer compared to a bundle properly staked papers. And when plastics found their way to vulnerability, a new form of money has emerged to become the next replacement.
Wolman describes meeting electronic experts in Japan who are developing biometric technology to make our easy plastic payments even easier. ‘One of these technologies uses the unique three-dimensional pattern of veins within every person’s fingertip. Touch your finger to a register, vending machine or subway turnstile and you can instantly settle up without having to break your stride. . . . I have a hard time seeing this kind of technology as negative,’ he says. Whether this is ironic or a pleasing upgrade depends on how you look at it. Electronic money perhaps and might as well change the way business is done, but on the other hand to look from barter’s perspective, lots of social and moral issues would be out of measure. For instance, in Bangladesh out of sympathy or whatever reason it is, we often tend to neglect minor balances in favour of the seller, which would just be another calculation in the E-System.
Besides, ‘the growth of E-money could also be bad news for banks. If other companies successfully offer their own brand of digital cash, they could bypass banks as primary providers of consumer financial services. The companies, not the banks, might be consumers’ first contact when they wanted to obtain some digital money’, writes Kelley Holland and Amy Cortese with bureau reports at Business Week. ‘Banking is essential to the modern economy, but banks are not,’ says J. Richard Fredericks, senior managing director at Montgomery Securities.
Wolman writes in favour of transformation, ‘The challenge of convincing people that a technology is trustworthy is nothing new. . . . Luckily, humanity has a solid track record of warming to innovations, including money-related ones’. ‘I’ll concede that point. It was only recently that I felt comfortable depositing checks at an ATM’, writes Michelle Singletary, Columnist at Washington Post. She adds in defense, ‘David Wolman can envision a time when we won’t need to use cash. In his cashless society, people can text money. But I’m not buying it. Didn’t we learn something from the Great Recession, when an over-reliance on all things not cash nearly took down our economy?
The story doesn’t end there; this transformation is bound to happen anytime. The concept of electronic money has been introduced a couple of years ago, it is still on test awaiting mass-acceptance. But for a country like ours, this is a massive turn and might risk the economy for lifetime.