Censored Lecture: The Death of Money is Inevitable

This summer a major point happened in the history of money. The first concrete sign was seen, that the end is coming to actual coins and cash. It won’t happen quickly, but we need to be aware of the facts. Two weeks ago, Canadian Mint Director Ian Bennett thought he can silence the story about mobile money at the Mint Directors Conference in Australia. With censorship or without, we are witnessing signs of an absolute inevitable future, where at one point in time there is no more cash. The question is not if, it is only of when.

This is first in a multi-part analysis why the mobile money revolution is starting. Also, as this is raw thinking on my part, this analysis is also detailed and fact-filled, so hopefully it brings some value.

To start with – lets be very clear – a coin or a banknote has no value in itself sans in theory – the metals in a coin can have some value but not the same value as old coins that had real gold and silver. Modern coins are not worth the metal they are minted in.

The only value in coins and banknotes, is that they exist as symbols of value. We trust the government that mints and prints them, and the money tends to hold its value reasonably well. So if someone gives me one coin worth an Euro or a Dollar, I can trust that when I give that same coin to someone else tomorrow, it will still be worth the same one Euro or Dollar. [This symbolism breaks down obviously when hyper-inflation hits in like recently in Zimbabwe for example, or in pre-war Germany in the last century, etc.]

Cash was a great invention. Before cash the way to conduct commerce was by trading. And then the issue of trying to trade one good for another was clumsy and had all sorts of problems. If I have potatoes and you have chicken, and I’d like some eggs, what is the ‘exchange rate’ of potatoes to eggs? Then what of potatoes vs. eggs a week later – if I bought four eggs from you and have two more at the end of the week, what is the value of an ‘old egg’ – the potatoes will last for many months and can still be eaten. The egg goes bad quickly.

Goods Exchange PaintingWhat is the exchange rate of potatoes to chicken – if I’d like some meat to eat? If I have many potatoes, it’s easy to split the group into smaller sets, but if you have one chicken and you want to use ‘half of a chicken’ to pay for something – it means you have to kill the chicken to split it in half. The barter era economy was extremely inefficient.

Cash replaced all that. You could have a monetary value for anything, and it could always be exchanged into cash and that cash could be saved – no loss in value – and used later to buy anything else. Cash could easily be split into smaller units without losing its values, one dollar is 100 cents, and if you have 100 cents, you can change it for one dollar, and the math always holds.

A clever commercial innovation was the bank – which first just allowed us to deposit money to be saved for us and withdrawn at a later date, paying us an interest rate on the money. For ‘rich people’ who had lots of money, it made sense not to hold it in their home, but to deposit the money in the bank and withdraw it only when money was needed. And the bank in turn, could then take its total deposits, and do some mathematics, and calculate how much of it they had to keep in the bank ‘just in case’ but then to lend out the rest of the money to anyone who wanted to borrow some money [and who had good banking credentials, i.e. good credit rating or good collateral etc.]. The bank would charge a larger interest rate from those who wanted to borrow money, and made a profit on the differences in the interest rates paid.

The more interesting bit was that banks would then open up branch offices in other towns, and now if you travelled to another town, you did not have to carry your money on the journey – and risk being robbed – you could go to the bank office in the other town, and withdraw money from your account in that other town. This was a very big improvement in global commerce. Eventually the banks spread to become national and even international, and eventually banks arranged payment methods across banks so you could move money from one bank in one country, to another bank in another country, etc.

Then came banknotes. And we had now a piece of paper that promised it is worth 100 dollars etc. A fragile payment method, that is subject to tearing and doesn’t like getting wet, etc. But it allowed the handling of large payments – imagine paying for your car with 30,000 dollars worth of coins?

This was all good for a time before digital connectivity. Today every person has a mobile phone. Every mobile phone can be used to make payments. Every mobile phone can be used to receive payments. Every mobile phone is permanently carried and every mobile phone is always connected. That means a new prospective digital financial system that connects 5 billion people on the planet [vs. the Internet which connects 1.7 billion people or the approx 2.2 billion people who have a bank account or credit card or both].

The money in cash was an illusion, but we believed in the illusion, that there is one dollar worth of value in a coin that said ‘One Dollar’ and we believed that a piece of paper that said ‘Ten Dollars’ had value of 10 dollars. That value can exactly as accurately be handled in digital money systems, but with numerous improvements.

First, with cash, you have to have ‘the right amount of cash’ on hand to handle any given payment. We do not walk around with all of our money in our wallets. We put our money in a bank. So then we have to try to guess how much cash we need on a given moment in time, and carry that amount in our wallet, and keep replacing that money by going to the cash machine/ATM every few days of the week. With digital payment methods, we can always pay the correct amount, provided that our account has that much as a balance or line of credit.

Then we have fraud in the form of counterfeit money. Banknotes have become progressively more complex to manufacture, because clever money-forgery criminals have gotten ever better at creating fake money. For many currencies there are also forged coins in the largest denominations, like the British Pound for example, that has been rather widely forged. There is crime in any system, but fraud in a digital money system is far more difficult to achieve, and as there theoretically is a digital footprint to every digital money transaction, even if some clever criminal figures out a novel way to steal money from the digital monetary system, the system can learn far faster and block such crime far more efficie
ntly than attempting to discover, recover and eliminate forged money.

Cash gets worn, especially banknotes wear out rather rapidly, so the money needs to be replaced. And cash gets dirty – coins and banknotes carry all sorts of bacteria and can carry diseases. Cash is heavy to move around, in particular coins. Cash can easily be lost. And kind of worst problem of all, cash can be destroyed with its value lost – imagine a burning house and the cash that happened to be in the desk drawer, that is burned. The money is simply destroyed with no value recovered for the owner. Digital money will retain its value theoretically forever [subject to a given bank going bankrupt, but that would affect any bank transaction, cash included] and even if you lose or break your mobile phone, the money in your mobile wallet can be saved usually automatically – where the value is kept in the network, not on the phone handset.

World's First Unemployment Cashier's Check, Issued by Industrial Comission of Wisconsin The early solution to the unforeseen need for cash, and to handle many larger payments, was the bank check [also known as cashier’s check]. We have a bank account with money in it. Then we write a check to someone, on a formal bank authorized piece of paper. We write the amount, and when that shopkeeper takes our check to the bank and deposits it, the money is deducted from my account. Good. An easy way to handle many payments, including the handling of payments via the post. So paying for your rent or electricity bill or telephone bill in America for example, you typically do it via check through the post. In pre-wire era, money was [and still is] sent via mail, hence the phrase "the check is in the mail."

Today, we have many electronic money systems to help handle the issue, in the forms of credit cards, debit cards and increasingly also contactless payment systems like Oyster in the UK, Octopus in Hong Kong, SuiCa in Japan etc. With these we have a far more instant handling of the payment – with checks it took days for the transaction to be completed, and there have been tons of crime related to writing "bad checks" [someone writes a check for a payment, while his account is empty. The shopkeeper trusts the value, and then finds out the check has ‘bounced’ and will have to try to collect the payment that is now missing?]

Plastic card payment systems such as credit and debit cards replaced part of the problem of bad checks by allowing instant electronic verification of the account. If the credit card limit had been passed or the debit card bank account balance was less than what you tried to pay, the system told the merchant that this card cannot accept this payment. A convenient instant-check to verify that the merchant will be paid. The plastic cards have since been adding various security measures to remain trusted and relevant in the modern age, from the ‘security code’ printed to the back of the card, to ‘Chip and PIN’ type of security [embedding a microchip into the plastic card, and also requiring a PIN code to be entered in certain types of transactions]. Ever more advanced plastic cards are now emerging such as cards with a small screen and a numeric keypad to allow security codes to be used.

Oyster Card from Transport for LondonMeanwhile the contactless payment systems [Oyster, Octopus, SuiCa etc] have brought great convenience in handling small payments without any pin codes or waiting. You see what the payment is going to be for your groceries at the supermarket, or how much the train fare is for the subway train, and you just touch your contactless card to the reader, and the payment is immediately deducted from your card. You keep adding value to the card when necessary, and use a reasonable amount of money on your contactless card, of how much ‘risk’ you are comfortable handling, in case of that card being stolen or lost, etc.

The internet brought us electronic cash, most famously PayPal. PayPal has moved past the point where more than 10% of all internet users now have a PayPal account. This service allows us to move money essentially for free from one internet user to another. The costs that used to be involved in international money transfers have been greatly reduced or eliminated. Many goods that are sold on the internet accept payments by PayPal. This service will let you withdraw money from to your regular banking account as well, for a small fee… that is still smaller than for instance, taking the debit or credit card into an ATM [Automated Teller Machine] from some other bank, because your home bank does not have an ATM in that city/country/continent.

These payment methods are all good steps in the right direction. Checks introduced the idea that we can manage our money beyond the actual cash we carry. Credit and debit cards brought us electronic payments. Contactless payments and PayPal have given us greater convenience and speed. All are good steps in moving beyond the limitations of cash. But mobile can handle all those issues easily, and be far better.

The first case of a mobile phone being able to be used to handle a payment was in 1998 as an experiment in Espoo Finland just outside of Helsinki, where two Coca-Cola vending machines were installed with a mechanism to accept payment by SMS text messaging. So rather than depositing coins to the vending machine, a user could send an SMS text message to a special phone number [unique to that specific vending machine] and the vending machine would momentarily receive the electronic command that money has been paid and release the intended soft drink. Meanwhile the payment would appear on the phone bill.

Paying for parking in Zagreb Croatia, 2001.: Send a text message with the number of your license plates to an three-digit number and you're doneThe innovations spread rapidly. By 1999 Norway introduced the first systems to handle the payment of parking meters by mobile using SMS. Au
stria offered the first case of train tickets paid by SMS in 2000. Soon lotteries, cinemas, fast food restaurants like hamburgers and pizza, taxis, etc would accept mobile payments. Croatia became the first country where you could live your whole day with every normal opportunity where you could use cash, was now also enabled for mobile/SMS payments. I was just in Brazil last year and saw that on the beaches of Rio de Janeiro you could pay for your ice cream by mobile phone. On another trip last year to Mexico, I was at a convenience store, and I saw that the person just before me paid by mobile phone.

Banks would also move into the mobile space, albeit quite cautiously. The first bank to offer alerts of bank account balances etc. via mobile phone using SMS was Merita Bank of Finland back in 1996. There was a rush of WAP related banking services [so called M-Pay] in the early parts of the past decade but many were short-lived projects. The movement of banking to mobile progressed slowly and the innovations came more from countries where the legacy banking industry was not well entrenched and the banking thinking was more modern.
Czech Republic was an early leader in banks adopting mobile services. And a major leader soon came out of South Africa, where for example years ago it was normal to get SMS alerts when money was withdrawn from a bank account or credit cards. I witnessed it myself when a colleague illustrated it to me at a cash machine/ATM in Johannesburg. He had his phone with him at the cash machine, he punched in the commands to withdraw money from his account. Before the cash machine had even started to count the money for dispersing from the machine, an SMS text message arrived to his phone, beeping, with the alert that x amount of Rand was being withdrawn from a cash machine at this address…

Then the first national mobile banking solutions appeared in the Philippines with the telecom operator [carrier] Smart launching Smart Money and its rival Globe launching GCash. The mobile wallet concept spread and by 2004, NTT DoCoMo offered the first fully modern mobile wallet solution as O-Saifu Keitai [mobile phone wallet] using the FeliCa contactless technology as part of the solution. This not only offered the user full mobile payments, but also the mobile banking, mobile credit cards, mobile payment history records, identity cards, and even the ability to provide electronic passkeys for access to offices, homes, hotel rooms and replacing car keys. The whole mobile wallet solution operated both wirelessly on the cellular radio network, and via contactless ‘near field’ communications like modern contactless payment systems. The most famous use of the Felica enabled Japanese mobile wallet phones is that when Tokyo subway users go to the trains, they just touch their phones onto the Felica readers at the turnstiles into the subway train system, and the one journey fee is automatically deducted from the account.

So then we have the concept of virtual currencies. These are best known for the micro-payment business model i.e. virtual gold inside Massively Multiplayer Online Games [MMOG, MMORPG] such as EverQuest and World of Warcraft, where tens of millions users play simultaneously in vast virtual universes of quests and battles and adventures. And the games have their own ‘monetary system’ ie virtual money, to help handle the economic issues. You can buy certain items like weapons and ammunition and items of sustenance like food, water, healthcare, etc. And you can find gold or treasures that have monetary value, and in many cases you can sell items inside the game as well. A monetary system is quite essential for such virtual worlds as Second Life for example. And then the more stunning part – for major online worlds like World of Warcraft, Lineage, Second Life etc, there is an ‘exchange rate’ either formally or informally, that allows virtual currencies to be converted into real money, ie US dollars etc. So if you know how to discover [or earn] some gold inside a wargame, you can then convert that virtual gold into real dollars that you can use in the real world. This opened a whole new micro-economy, also known as "farming", where a horde of Chinese and Vietnamese gamers play for money [for cents per hour] to earn as much value as they can, and the items and gold is purchased by gamers in Western Hemisphere.

Gold Farmers in China who play World of Warcraft in full 8 or 12 hour shifts, generating virtual wealth

Gold Farmers in China who play World of Warcraft in full 8 or 12 hour shifts, generating virtual wealth

But that traces back to humble roots of a children’s online playground called Habbo Hotel, by Finnish company Sulake. This is the ‘Second Life for Children’ but actually pre-dates Second Life by many years. While most adults are blissfully unaware of Habbo Hotel, Habbo has become the biggest virtual world on the internet, and has a total population of 175 million Habbo Avatars created. Note that the average age of Habbo Hotel users is about 15 years, so this is a youth playground. If that was a country on the planet, Habbo Hotel would be the sixth largest country by population. And like real countries, there is an economy inside Habbo Hotel, fuelled by a virtual money system. And the mobile dimension to this story? Kids don’t have credit cards or banking accounts. But they do have mobile phones. So Habbo Hotel allows kids to make payments for goods inside Habbo Hotel, by paying via SMS on their mobile phones. They can use their mobile phone to buy Habbo Hotel money, which then can be used to buy any items of virtual goods inside Habbo Hotel, like a cool T-shirt or some funky shoes, or a wild haircut, or a nice poster to the wall of the virtual room.

This then turns into something of a weird behavior pattern. In some worlds and some users, they can spend more on the virtual good for their avatar, than on the same "real world" good that they can buy for themselves in the real world. In South Korea, the biggest virtual world is Cyworld [about half of the total South Korean population has already created an avatar of themselves inside Cyworld]. and that is quite normal for some users to spend more of their money to decorate their avatar, than what they spend on real clothes, haircuts, make-up, etc on themselves.

Mophie's intelligent case for iPhone 3G/3GS integrates phone with a payment applicationHere is the really ‘big idea’ about why mobile payments are far more potent than traditional electronic payments. Every mobile phone can become a payment terminal! Imagine two people at a market. One is a seller, one is a buyer. The seller has a nice piece of antique furniture. The buyer wants to buy it, but doesn’t have enough cash. The buyer does have plenty of credit on his credit card. The seller also has a credit card of the same type – let’s say both have the same credit card. Why can’t I just move money from my credit card to yours? With us just touching our wallets, or something?

That is how cash works. I have cash, I give it to you. Now the crazy part is, that you have a credit card, and I have a credit card, and I have enough credit on my card to buy that piece of furniture. But you cannot use your card to receive money from me, at that point in the market. You need to go and get a ‘payment terminal’ to connect to card owner’s system, to verify my card and that there is enough money, etc. That system is expensive.

But every mobile phone can make payments without any further changes today. And every mobile phone can accept payments, without any further changes today. It is only up to the mobile operators/carriers to enable such systems. The device can already do it today. So let’s go back to Kenya.

In Kenya, if you are the merchant, you just take out your mobile phone, give your number to me, and I send the money to you. Ten seconds later you have received the notification on your mobile phone that your account has been added by X dollars paid by so-and-so, and you know I have paid you. I know my account has been deducted. The monetary transaction has been completed, that easily.

Using M-Pesa Cash with a simple phoneSo while the industrialized world moved slowly to mobile money, in countries of the Emerging World, mobile money could spread very rapidly. They tend not to have a strongly entrenched legacy banking industry to try to block monetary innovations. A perfect example is M-Pesa of Kenya where Susie Lonie of Vodafone has been involved setting it up for the Vodafone Kenya affiliate Safaricom. M-Pesa launched in 2006 and as the real banking use in Kenya was very modest, M-Pesa brought considerable payment benefits to ‘the unbanked’ which was by far the majority of the Kenyan population.

M-Pesa was actually not a full mobile banking solution. It was more a deposit and payment system. An M-Pesa user could deposit money to M-Pesa, could withdraw money from it as cash, and could move money from one M-Pesa user to another i.e. make a payment.

Imagine the benefits just in terms of daily economic activity in a poor African country. If you had to go to the neighboring village to pay the teacher where your kids went to school, it might take you several hours by walking or perhaps by bicycle to go there, make the payment, and return back home. And you risked being robbed along the way. But now, with M-Pesa, you could pay just by pressing a few buttons on your phone. The teacher in the other village would receive the money on his or her phone, and could go to any M-Pesa authorized retail merchant, and withdraw the money as cash if needed, and obviously, as the teacher could use M-Pesa to pay as well, the teacher would not even need to withdraw the money as cash.

Which brings us to the SIM card merchants. That is a one-directional money situation. in almost all countries where prepaid phone accounts are popular, there is a large eco-system of prepaid top-up services, where you go to a local merchant, like a news stand, and buy some balance to add to your account. You may deposit more minutes/messages to your current SIM card, or you can buy a new SIM card, depending on your situation and need.

Now, what happens. In a village, there are many who need top-ups, and the SIM card vendor keeps collecting cash from the villagers. He is soon in the situation, where he has too much cash in his shop, he has to go to the bank to get rid of some of it. Wouldn’t it be nice to have the same customers come in and ‘withdraw’ the cash?

This is why M-Pesa merchants [and G-Gash and Smart Money merchants in the Philippines etc] will act as the cash dispensers. So you decide that your SIM card which currently contains 25 dollars in value, is too much, and you want to ‘withdraw’ 10 dollars, like going to a cash machine/ATM. You go to the merchant, you authorize your account to withdraw 10 dollars. The merchant receives that money digitally from your account [into his merchant account] and he gives you the cash [minus a handling fee]. So now, we have in effect a virtual cash machine/ATM network that covers tens of thousands of merchants nationwide. All who regularly take in cash when topping up SIM cards and selling new SIM cards, but now can get rid of some of that accumulated cash, by paying out the cash to their customers. And in effect, the merchant then was able to ‘move’ money from his cash in his store, to his merchant account as digital money. Brilliant, simple, elegant.

And the point – every single mobile phone becomes a payment terminal! This is something no other digital technology can hope to match. Your credit card cannot handle my payment. Your debit card, your contactless card can’t do it. Your internet payment, even PayPal – can’t do it unless you have cellular connectivity – in essence forcing your iPad or netbook or notebook PC to behave like a mobile phone. And how many of the hundreds of millions of portable PCs actually have a cellular 3G connection? Most rely on Wi-Fi, and that means it’s not everywhere at any time. Mobile phones can act as the payment processing devices anywhere, anytime, for anyone. Even for a 13 year old young entrepreneur who is years away from qualifying for a credit card..

Then another magical thing happens. The pre-paid SIM card you have, which has some balance on it, say 5 dollars worth, becomes convertible as cash. You can make a payment to someone else, by handing over a prepaid SIM card with 5 dollars in value, and the other person just inserts the SIM card into his or her phone, verifies there is that balance, and accepts the SIM card as your payment. Magical. We are now witnessing this happening in many markets.

So what happens when the existing digital payment systems migrate to the phone? We can see that future existing already today, in one country, South Korea. Of all advanced industrialized world countries, South Korea is now the most advanced in mobile money. They have already gone through the full integration and coordination with the telecoms industry, the banking industry, the payments industry and the credit cards industry, with full government support and approval, including the necessary legislation etc.

So today all major banking services can be deployed on one SIM card on your phone. The SIM card is particularly secure and unique to one South Korean citizen. And upon that SIM card, you can then have various banking and credit card entities – ‘authorize’ payment solutions. So if for example Visa has approved your credit card application – it will be enabled on that SIM card on your phone. But on
the same SIM card you may also have VISA, MasterCard or American Express, etc. and your various banking solutions. All independently approved, separated so that rival services cannot access your info, but why would we need to carry ten different plastic cards, when one digital identity is all we need?

So now they have that funky question that South Korean credit card companies will ask you on the phone. When they approve you as a first-time credit card customer, and obviously they have instantly approved your credit card within seconds, onto your phone, so it now acts as a valid credit card in any point of purchase in South Korea – the customer service representative will ask you on the phone – ‘do you want plastic, with your credit?’ by which the person means, do you want an old-fashioned plastic format credit card, to be mailed free of charge, in about two weeks, to your home address? You don’t need that in South Korea where essentially any merchant who accepts credit cards can take the payment via the phone – but if you happen to travel abroad to an ‘old fashioned country’ like say Germany or the USA or France or Britain, where they ‘still use plastic  credit cards’ – then the Korean company will happily send you the free plastic credit card to your home.

This is so advanced, that by 2007, one quarter of all Visa card holders in South Korea had no plastic card at all. I am sure it’s well past half of all Visa card users in Korea today. But think about it – the time of plastic cards is coming to an end too. Why not? If your phone can truly do everything your plastic card can [and more], why bother with the plastic. Soon we will not need the wallet anymore!

Everyone has a payment authorization device in their pocket. Everyone also has a payment processing device in that same phone. Payments can be done instantly between any two people on the planet [soon, obviously we are still in early steps on this level of integration but giant companies such as Vodafone, Nokia, NTT DoCoMo, etc are already deploying such solutions]. The whole economy benefits, payments get processed far faster, allowing for more rapid ‘velocity’ of money in the economy. You get paid faster, your wealth increases, you can process payments faster, and the economic drain of handling payments diminishes.

M-Pesa has become a total transformational change to the Kenyan economy. Rival m-banking systems were of course soon released by the rival mobile operators also in Kenya. In three years, half of all banking accounts in Kenya were now mobile banking accounts. By May of this year, 10% of the total economy was moved through mobile phones, and the early projection was that 20% of the Kenyan economy would transit a mobile phone by the end of this year. Last week I heard that this has now been upgraded to 25% before the end of this year, 2010. That is what M-Pesa has done for Kenya in less than four years. No wonder Susie Lonie and the team at M-Pesa won the Economist award for this innovation.

Now while so far M-Pesa has been only a very stripped down mobile payment system, they are now in the process of upgrading the system to a full bank which means acquiring a banking license in Kenya etc. So if you think this was somehow enormous change, do bear in mind, that was when M-Pesa did not even offer full banking services. Now that they will upgrade the service to full banking – and many of their M-Pesa users will no doubt also apply for future ‘real banking’ services such as loans, credit cards, etc, imagine how much more significant M-Pesa will become to the local economy.

So then lets fast-forward to today. Now we have mobile payments enabled in various countries across various businesses and industries, on various technologies. And we will see interesting developments. I think the most fascinating is the one with crime.

Cash always attracts criminals. In Estonia the government observed that the parking meters were particularly prone to crime, anything from vandalizing parking meters to robbing those who collected coins from the meters, to more sophisticated parking crime by the mafia, such as the scams suggesting that the parking meters on one street are broken [when they weren’t?] and a criminal, dressed up like a policeman, would then collect cash payments from car owners and issue official-looking receipts for supposedly legitimate parking. Then the criminals vanished, the car owners returned at the end of the day to find parking fines for all cars on that street – and obviously the ‘receipts’ for parking turned out to be fakes.

Well, the Estonian government noticed that all Estonians had a mobile phone and they had long since deployed mobile parking solution. So they simply terminated coins as acceptable payment for parking. And overnight, this one form of crime vanished, and the government got more of the real payments relating to parking, and eliminated some of the costs that were involved in collecting the coins from the parking meters nightly.

I should point out that not all parking payments in Estonia are done by mobile. You can also pay by credit cards, debit cards, etc. But about 75% of all parking payments are now done by mobile – and none by cash. It became very literally the first country, where one small industry [parking] has now abandoned cash as a valid payment mechanism – in favor of mobile payments. We see this moment as the ‘beginning of the end’ for cash. Now it is only a matter of time.

Then we had a similar instance of a crime wave hitting Sweden, with bus drivers targeted for the cash they carried to give change to those who paid bus fares by cash. And again, since all Swedes already have mobile phones, and since Sweden had already deployed mobile payments, the government decided to look into the Estonian parking example. It was an easy decision. Rather than the very expensive technological solutions of building bullet-proof glass encasements around bus drivers, simply eliminate cash as a payment method, and allow mobile payment in the busses, and that removes this opportunity for crime. Simple, elegant, obvious.

So, now we can see that there is the beginning of a trend. We will see ever more of this, in various little industries worldwide. But it is only a one-way street – nobody is abandoning mobile payments in favor of cash. So we will see the gradual transition away from cash. And then this August saw a significant point in time. The Swedish Parliament became the first formal government entity in the world, to commence discussions about the timing of the ending of cash. Led by various Swedish activists who feel that manufacturing cash is a wasteful effort [i.e. there are green values in not killing trees for banknotes and the manufacturing of various metals to create our coins], and there are various bacteria that we transmit in our cash – so there is a health dimension to the problem. Led by a member of the Swedish pop band ABBA, there is a movement now in Sweden to end the manufacturing of cash, so they have started the discussions of when shall Sweden do it. Not if, but when.

I have since heard that there are several African nations who are considering similar initiatives. And if I know my Nordic Europeans, if Sweden thinks about it now, very soon we’ll hear the Finnish Parliament get into those discussions soon, and perhaps the Estonians actually accomplish it before the Finns, and no doubt the Norwegians and Danes will get into the act very fast as well. It may end up being a race, of who ends cash first..

But there is no doubt that the time of minting coins and printing paper money is coming to an end. It won’t end in the next few years, it will take probably decades for the end to come, but it is inevitable. This process has a simple name: evolution.