We’re moving toward a cashless society, and lots of people are going to be left behind

We’re moving toward a cashless society, and lots of people are going to be left behind

The tech industry has offered partial solutions to this inequity, but mostly in self-serving ways.

A version of this essay was originally published at Tech.pinions, a website dedicated to informed opinions, insight and perspective on the tech industry.

This week, I was driving in my neighborhood when I spotted that most American of sights — a bunch of kids running a lemonade stand, waving signs and trying to flag down passing cars. In some ways, it seemed like a great business opportunity — the temperatures where I live have rarely dipped below the high 90s lately. And yet I didn’t stop — not because I don’t like lemonade (or kids), but because I simply don’t carry cash anymore, and I’m fairly sure the neighbor children weren’t taking credit cards.
This got me thinking about all the people and sectors of our economy that are still dependent on cash, and how they might be affected by our increasingly cashless society.

Cash is in decline

Whether anecdotally or based on solid data, I think most of us have a sense that cash is in decline. One study from last year suggests that cash is the preferred payment method of just 11 percent of U.S. consumers, with 75 percent preferring cards. In other markets such as China, cash is dying out even more quickly, with mobile payments increasingly eating into both its share and that of cards. Though my local dry cleaner in New Jersey was a rare (and suspicious) exception, I very rarely come across businesses that don’t take cards, to the extent that it now really takes me aback when it happens. For many of us these days, credit and debit cards — and to a lesser extent, mobile payments — are making cash largely irrelevant. I still have a huge jar of loose change I accumulated over many years, and which now mostly gets used for the occasional school lunch or visits from the tooth fairy, but not much else.

But not for everyone

However, assuming that this pattern holds for everyone would be a mistake. There are still big sectors of the economy and large groups of people that remain heavy users of cash and are heavily dependent on it, and as others move away from it, that’s increasingly going to cause them problems. Sadly, this likely applies most to some of the more vulnerable and marginalized parts of our society, who will be least in a position to make the changes necessary to keep up as the rest of society moves on.
Just a few examples of people or businesses still dependent on cash:
  • Homeless people and others who ask for money on the streets
  • Charity workers soliciting cash donations in public areas
  • Manual and casual laborers who get paid in cash, either for convenience or for tax reasons
  • Cab drivers
  • Those who don’t have bank accounts or credit cards, including many without regular incomes
  • The elderly
  • The very young, also unlikely to have bank accounts
  • Anybody who works based on tips, from waiters and waitresses to maids and barhops in hotels to valet parkers
  • Small local retailers and restaurants that can’t justify high credit card processing fees on mostly small purchases.
The list could go on much longer than that, but the point is that there are those who are in some cases heavily dependent on cash and are relatively powerless to make the changes necessary to keep up. These are often among the poorer and least educated people in our society, and therefore those with least access to technology, the traditional banking infrastructure or information about how to adapt.

Tech has offered partial solutions

The tech industry has offered partial solutions, but mostly in self-serving ways. Payment processing company Square has transformed many a small retailer or producer from a cash-only business to one that can take credit cards and even Apple Pay, and has created ways for those without traditional cards to carry balances and make payments with their phones. Amazon has introduced methods for those who deal mostly in cash to obtain one-off or refillable cards to be used to pay for things on its site. Venmo has turned erstwhile cash transfers into electronic payments. But these solutions mostly tear down limits to the addressable markets for their own products without necessarily expanding economic opportunity or promoting inclusion, while also often being based on internet and mobile technology not available to all.

But needs to do more

What we need are solutions for the rest of society, and especially for those without access to the internet and phones to be able to receive non-cash payments. What about an app that allows patrons or would-be donors to set up a transaction in an app, and allows the recipient to walk into a bank or store to pick it up in cash with a privately shared code? Or an app that allows users of basic smartphones to receive payments and carry a balance without creating an ongoing relationship with the payer? What about a service that would provide meals, access to beds and other facilities, or other needed items to the homeless based on donations from smartphone users?

Technology has such an enormous potential to reduce friction and make payments simpler, but what we need are innovations that do the same on the receiving end, including in ways that don’t themselves require technological solutions.
Calling on the tech industry to step up to big societal problems has been something of a theme lately in my columns, but I can’t help but think that this is yet another area where those already most on the fringes of society will just be left further marginalized by technology rather than brought into the fold by it. It doesn’t need to be that way: The bright minds that have created so many technologies that help us deal with our “first-world problems” can surely find ways to help those with more biting and pressing challenges as our society continues to evolve.

Jan Dawson is founder and chief analyst at Jackdaw, a technology research and consulting firm focused on the confluence of consumer devices, software, services and connectivity. During his 13 years as a technology analyst, Dawson has covered everything from DSL to LTE, and from policy and regulation to smartphones and tablets. Prior to founding Jackdaw, Dawson worked at Ovum for a number of years, most recently as chief telecoms analyst, responsible for Ovum’s telecoms research agenda globally. Reach him @jandawson.
Website: https://www.recode.net/2017/7/24/16021630/cash-payments-cashless-mobile-inequity-square-apple-pay-venmo-amazon 
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WeChat Pay Has Launched In M'sia, Here's Everything We Know So Far

  • WeChat Pay is now available in Malaysia, and we are one of the first markets outside of China with the wallet localised to our currency. 
  • WeChat will be able to capitalise on the existing 20 million users in Malaysia.
  • They also have an existing partnership with Hong Leong Bank to enable WeChat Pay merchants. 
Rumour has it that WeChat Pay will be launching in Malaysia sometime in June, preferably before Raya Aidilfitri hits.
And the launch will be happening just in time too, as PM Mahathir has expressed interest in turning the country cashless.
While it’s seemingly just another e-wallet to join the multitudes of other e-wallets that have appeared in the Malaysian market recently, one key difference is the role WeChat played in changing the payment infrastructure of the whole of China.

Tencent’s secret was QR codes / Image Credit: Edward Lindeman on YouTube

Tencent’s brainchild was able to win the e-wallet battle in China, and the e-wallet movement in China is so thoroughly entrenched that you can feasibly live an entire month in China without ever touching cash—even when buying hawker foods or shopping in wet markets.
Could WeChat Pay be the final missing link that truly brings the e-wallet era to Malaysia?
Here are a few things to know about WeChat’s launch into Malaysia.

1. Malaysia will be the first country outside of China to receive WeChat Pay.

WeChat Pay is technically available for everyone across the globe, but Malaysia will be the first country to receive WeChat Pay in our local currency—the ringgit.
“Malaysia is actually quite large in the sense that we have 20 million WeChat users, huge potential, and the market is quite warm towards internet products from China,” said senior vice president SY Lau.
WeChat might have an advantage in the acquisition of users in Malaysia, but time will tell if this can translate to a lead in the region that sees AliPay operating for about 1 year now.
Payment methods that will become available in Malaysia include Quick Pay, where vendors can scan a QR code on a customer’s mobile phone once they’ve made a payment for a quick transaction. Or, users can scan a QR code set up by the vendors to see a product’s information or transaction guides.
WeChat also offers options for In-App Payment, where vendors can authorise WeChat to process payments when users make payments through other apps.

2. WeChat Pay Malaysia has been on beta for 2 years now.

Tencent Group has been beta testing an early run of the ringgit-enabled wallet for two years now, by selecting 10,000 Malaysian WeChat users.
Those selected get a dual version of the wallet—one for ringgit and one for RMB, though users at the time weren’t able to transfer currencies from one wallet to the other.
That being said, on the user’s side, WeChat Pay should be compatible with any credit or debit card, and WeChat has already enabled foreign credit cards to be tied to WeChat Pay accounts.

3. Local banks are already on WeChat Pay.

As early as November 2017, Hong Leong Bank has already enabled merchants to accept payments for WeChat Pay, in anticipation for the wallet’s launch in Malaysia.
When this collaboration was done, it was to ensure that Chinese tourists can continue using their WeChat accounts while visiting Malaysia, though once WeChat Pay launches for Malaysians, then there will already be a list of merchants that accept the e-wallet from day zero.
WeChat Pay’s wallet can be found in the “Me” tab of the normal WeChat app.
Topping up the balance is relatively simple.
1. Hit the “Balance” icon in the wallet.
2. Accept the “I understand” popup explaining that the maximum limit is RM4,999.
3. Set up your payment PIN for the e-wallet.
4. Enter your card payment details, and key in the amount.
5. Verify the top up through your bank’s security page.
6. You’ll be able to see your new balance after that’s done.
At the moment, it appears that you can only do mobile top-ups or buy bus tickets in the app itself. There will probably be more merchants coming on board in the near future.
  • For more on e-wallets, you can read up about the homegrown e-wallet, BigPay that will apparently “be worth more than AirAsia”. 
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