For those of our readers unfamiliar with ‘the pantomime’, this Christmas-time tradition – unique to certain English-speaking parts of the world – is a slapstick musical-comedy theatrical production based on fairy tales, with music, singing and dancing. It is aimed at children, and good always ends up prevailing over evil.
Pantomimes are extremely formulaic – no matter what particular tale they are based on, there will always be a hero and a heroine, a pantomime dame and a villain. And the latter – whose appearance on stage is greeted with boos and hisses by the audience, will always – at some point – make a pronouncement such as ‘I am the most powerful man in the land’. ‘Oh no you’re not’ shout the audience. ‘Oh yes I am’ he bellows back. ‘Oh not you’re not’ roars the audience in time-honoured tradition. And so it goes on.
In case, by now, you are wondering what pantomimes have in common with payments, the analogy is simple. ‘Cash is dead’ say the anti-cash brigade. ‘Oh no it isn’t’ shouts our industry. ‘Oh yes it is’ roars the cashless lobby. And, so it goes on.
In the last couple of weeks alone, there has been a slew of articles and reports saying either that cash is as strong as ever, or that it’s on its last legs. The report by the British Retail Consortium shows that cash transactions in the UK in 2011 were both cheaper (by a long chalk) and faster than the alternatives. A recent Mastercard survey shouts out that Americans are now shifting towards a cashless society. A new report by Javelin – Retail Point of Sale Forecasts 2012-2017 – states that cash is no longer king. The tech investment firm NextView Ventures pronounces that m-payments are the ‘the trillion dollar industry that never happened.’ And finally, in a book, the author and journalist David Wolman takes potshots at banknotes and coins in The End of Money (published a few months ago), which presents the payments scenario of the future.
It really is a case at the moment of take a view, any view, on cash or cashless, and there will be an article out there to support it.
Some of these articles are considered, thoughtful and factual. But, all too often, the debate is framed in facile, even childish, terms.
In launching its Cash Connects Us video, ATMIA has blamed the card industry in general, and Visa in particular, with good reason, for their War on Cash campaign (you started it, no I didn’t, yes you did).
Mastercard meanwhile, has launched a World Without Cash campaign. ‘If cash is king, then cashless is democracy’, it opines. ‘To put it simply, cash is a thing of the past, and everyone, from your eighty-year-old neighbor to the CEO of the next big tech company, is making the move towards being cashless. That being said, there are still those who are slow to reform, clinging dearly to the antiquated ways of the old “monarchy.†Well, we’re here to topple that regime. It’s time for the revolution to take place and for MasterCard to champion this goal.’
This has been accompanied by an invitation in its Cashless Conversations social media newsroom to submit an entry to its ‘I use less cash because…..’ blog in return for the opportunity to win a prize (a prepaid card, as it happens).
Pitting one form of payment against another in ‘either/or’ terms , while it may be good for generating eye-catching headlines, is missing a more subtle point, which is that the growth in payment transactions, in whatever form they take, is to the advantage of us all.
This is borne out by the clear evidence from around the world that, whereas cash is shrinking in terms of its share of overall payments, in volume terms it is still increasing because payments overall are increasing. Payments – again, in whatever form they take – facilitate commerce which generates economic growth and, with it, growth in payments. It matters not that cash has a smaller share of the payments landscape. . What matters is that there is a larger landscape to share.
The best current demonstration of this is M-Pesa in Kenya – arguably the most successful deployment of m-payments thus far. The success of the scheme has been remarkable. What has also been remarkable, however, is that it has been accompanied by a growth in cash. As we reported in the last issue of Currency News, since 2007, the number of M-Pesa users has grown from 200,000 to 18 million. In the same period, cash in circulation has grown from 197.9 billion Shillings to 389.7 billion Shillings. This growth would simply not have happened if payment instruments were confined to cash or m- payments alone, but by allying cash to m-payments, economic activity follows and everyone wins.
It is this type of information and opinion that should frame the debate over the future of payments – not an adversarial ‘one versus the other’ argument that may be good for grabbing headlines, but does little to advance the genuine merits of different payments techniques, either over one another, or in tandem with one another.
This is the view of Vodacom, the pan-African mobile telecommunications company that is one of the companies at the forefront of m-payments in the continent, ‘The trend over time is for emerging payment technologies to be added to existing methods, rather than replacing them, it said in its presentation at the Mint Directors Conference..
In a similar vein, Tim Cobbold, CEO of De La Rue, states in his interview in this issue that ‘cash and electronic payments are not necessarily mutually-exclusive.’
Both views – coming as they do from opposite ends of the payment supplier spectrum – should form the framework for the ongoing debate on payments, and not the knock-about pantomime-style war of words that has been all too common.
