Where’s all the money gone? I don’t mean why it’s flowing out of your bank account in ever greater volumes. Actually, I do mean that, but in the most immediate, tangible way. Not very long ago, you knew what you spent because you could count the banknotes as you handed them over. Money was physical, tangible, and real. That’s less true today.
In 2016 - for the first time in history - more money transactions were racked up using credit and debit cards than paid in banknotes. It seems we’re turning away from the reality of money, in favour of something that’s invisible, intangible - and not nearly so real.
This has a very practical consequence because as money disappears, it’s increasingly difficult for us to track where it’s going. All of those subscriptions, app purchases, taps, waves, Ubers and god-knows-what-else hit our bank accounts 24x7, and we don’t really have any way to make a good accounting of where that’s all going, when, why, and to whom.
It doesn’t really behoove anyone to let you know too much about where your money is going. After all, if you knew, you might put a stop to it ... and by doing so stop the chance that your credit card provider can charge you more fees and interest.
There are all sorts of apps and tools that help us into financial discipline, should that be warranted, but nothing really puts us into the stream of our finances, that never-ending ebb-and-flow of earning and spending. If we were a billion-dollar corporation we’d have custom tools and visualisation dashboards and a staff dedicated to keeping us fully informed. But as mere mortals, we can simply wave good-bye as that cash departs, never to be seen again, on a voyage whose rationale we only dimly understand. (What was that app store purchase for: Did I buy some music? Downloadable content? A Pokémon Go snare?)
Money is becoming invisible, and invisible money has a tendency to leak away.
In some ways, we want money to become invisible. The smartphone may be ubiquitous, but it doesn’t really integrate well with money. You can connect your credit card to a smartphone (provided your bank has done the necessary deal with Apple or Google) but that’s just an extension of the credit card.
Why can’t we have invisible money inside our smartphones? Yes, that brings up all the weirdness of blockchains and bitcoins and cryptocurrencies and all of the debate and regulation and blood curdling screams from the more Libertarian among us, but if our money’s already invisible, why not grasp the nettle and make a form of digital money that has the same qualities as a banknote?
These ‘fedcoins’ have been talked about for a few years - IBM was rumoured to be deep in development with the US Federal Reserve on such a product - but right now smartphones and money live in entirely different worlds. That won’t go on, if only because most of the billions who have smartphones don’t have credit cards, will not have credit cards for years, and yet still need to do transactions on those smartphones.
There’s another group who have smartphones but don’t have credit cards - kids. Many kids get their first smartphone when they’re ten or eleven, but still rely on mom or dad to pull out the plastic when they make a purchase, sometimes because the low-end smartphones kids use often omit NFC. You can get a debit card for kids, but that may not be what kids want. Someone I work with recently did just that, but her daughter refused the card. “That card is not how she thinks of money," my colleague advised. “It’s all online or mobile to her."
For the youngest generation (post-Generation Z), money has seldom been real. It’s always been available in an invisible form. The Bank of Mum and Dad can pay out with a transfer, not cash. And if you give them a chance to hold cash in their hand, they instinctively reject it. It just feels wrong.
That generation won’t want a credit card - at least not any credit card we’ve ever known. They’re going to want something completely invisible, pervasive, and personal. Swimming in that stream of data, alongside the money they’ll soon be earning as well as spending, they’re forcing us to map out a path across the chasm between a world where money was the most tangible thing, into a world where it’s never tangible again. ®