Pickpockets Protest Cashless Society|
July 02, 2013
Is our society about to go entirely digital? Are our coins and bank notes about to become obsolete? Everybody has an opinion. The pickpockets in Kenya recently went so far as to call a press conference to protest local banks introducing new electronic payment systems!
The press conference in Kenya, held in secret at a remote location for obvious reasons, took place during late April. The conference was brought about in protest of newly introduced electronic and mobile money vehicles being promoted by local banks.
A pickpocket using the name Yellow Pages said, “Whenever people carry ATM cards and keep money in their SIM cards, it means that whenever we dip our hands into their pockets, we come out empty handed! This is threatening our means of survival [and] must be discouraged in the strongest terms possible.”
Yellow Pages continued, “For all those people with brilliant ideas, this is the time to stop thinking and let the rest of the world overtake you for the sake of our job security!” He added, “This should not be a cause of celebration for anyone because Nairobi and the country at large will have lost the coveted position of being the crime capital of East Africa.”
This may appear to be humorous to readers, but unfortunately it is not. The press conference was real. Yellow Pages summed up the point of holding the conference by saying, “The government should assist us gain the necessary skills meant to help us skim ATM card information as well as providing loans. This will enable us [to] afford the technology required for the job and claw back the market share away from the foreigners and get it back to the locals. We must protect local jobs at all costs!”
The true “threat” to the use of coins and bank notes by various other forms of transfers of value is questionable. Ghana Commercial Bank Ltd. hosted a roundtable meeting on the subject April 29. The theme of this meeting was “Achieving A Cashless Society: The Role of Banks, Government and the Customer.” The event was attended primarily by business leaders, corporate executives, academia, and representatives of the public sector. Almost everyone attending was from Ghana or Nigeria.
GCB Managing Director Simon Dornoo was a primary speaker at the event. Dornoo said that if Ghana became a cashless society the country could benefit by increasing the efficiency in which payments are made while offering better information on payment transactions for policy making purposes. There would also, according to Dornoo, be what he described as a reduction in the cost of minting coins and printing bank notes. The wording of this statement suggests Dornoo doesn’t expect physical currency to vanish entirely.
The conference in Ghana comes on the heals of an April 16 MasterCard press release in which the card company announced “New Zealand fast becoming a cashless society.” MasterCard based its announcement on findings from its “MasterCard’s Survey on Consumer Purchasing Priorities” report released the same day.
The MasterCard New Zealand study indicated 42 percent of those surveyed use a debit card to purchase groceries, 41 percent use the card at restaurants, 38 percent for personal care goods, and 33 percent for services. Credit card use represented 43 percent of retail shopping transactions, 58 percent of mortgage and rent payments, and 46 percent of utility bill payments. The survey involved 500 people between ages 18 and 64 who own bank accounts and who access the Internet at least weekly.
MasterCard New Zealand Country Manager Albert Naffah triumphantly announced, “The days of carrying cash are numbered and it’s clear that New Zealand is moving steadily towards becoming a cashless society. We already know that Kiwis lead the world in the adoptions of electronic payment solutions with a strong willingness and readiness among consumers to adopt mobile payment methods.”
He continued, “Locally, we’ve seen the desire to pay by card helping drive demand for businesses to offer contactless payment technology. With many of New Zealand’s most popular retailers now allowing customers to ‘tap-and-go’, and with digital wallet technology expected to be available locally in the future, we’re at a real tipping point when it comes to contactless technology adoption.”
Nothing was said regarding if the reason for the upsurge in the use of cards had anything to do with a weakened economy where people simply need to borrow the money to pay such things as food, rent and mortgage payments.
Ghana and New Zealand are not alone. Sage Pay is an Irish supplier of what it calls contactless payment systems.
On April 23 the Irish publication Business and Leadership quoted Sage Pay spokesman Sean Wilson as echoing the same sentiments as those of Naffah, saying: “Ireland is increasingly becoming a cashless society. Allowing customers to make low value payments by debit and credit card can be a top-heavy cost to retailers. By looking at accepting contactless payments this will help them reduce those costs. There is also a huge value to customers. Recent figures report that Irish customers spend 11.2 minutes queuing daily to pay for low-value purchases. Contactless payments help eliminate these lengthy queues.”
Before coin collectors run wholesale for the exits you’d better listen to what South Africa’s SBV Group Chief Executive Officer Grant Dunnington had to say. SBV optimizes bank cooperation for processing and security the transportation of bulk cash.
In a March 27 interview with Business Day Live the SBV officer said, “People have been talking about a cashless society for many years, but I don’t see it happening. Cash remains favored for high-frequency, low-value transactions.”
Dunnington defended his statement by noting that the amount of cash in circulation in South Africa has increased by an average of 103.4 billion rand for each year of the past decade. Dunnington further noted this is a 9.7 percent annual increase, which is faster than is the pace of inflation.
Dunnington continued, “There are a few countries where this is not happening and there will be a proliferation of new payment mechanisms. But checks have almost halved in usage, for example.”
The Reserve Bank of South Africa acknowledged the growth rate of cash has been greater than 10 percent in the past year.
SBV Chairman Jason Taylor said the supply of cash continues to grow annually “despite all efforts to move payments away from physical cash.” SBV has 70 trucks operating in Nigeria, which had representation at Ghana’s recent cashless society conference.
Dunnington pointed out, “SBV is in discussions in Namibia for cash processing operations, while Uganda and Lesotho are also being explored.”
The European Union is about to introduce a new €5 bank note on May 2. In preparation the European Central Bank with Oesterreichische Nationalbank (The Austrian National Bank) held a conference April 22-23 in Vienna.
At that conference ECB Executive Board member Benoît Cœuré said, “While there can be no objections to a society with less cash, a cashless society is not possible in the foreseeable future. We estimate that in the euro area 70 to 80 percent of the number of transactions, and 50 to 60 percent of the value of all transactions at the point of sale are still made in cash. In one way or another, this will put pressure on the cash sector to become more efficient.”
Perhaps Yellow Pages should move to South Africa or the European Union.
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