Much of the debate around new payment methods is centred upon security and privacy. But I’m not sure it’s nearly as much of an issue to people as it is often made out to be. OK. I’m biased. I’m a payments geek. I think the tech is fascinating, I think that changes in the way we pay for things will have a huge knock-on effect on the way we shop, bank and arrange our finances. (And, most importantly, I dream of the day when the world finally embraces the 21st Century and finally kills off cheques.)
What’s almost as interesting as the tech is the way the media covers the whole subject. Bitcoin generates endless headlines, way out of line with its ‘real world’ importance. Just this week, two executives who operate Bitcoin exchanges were charged by US prosecutors for conspiring to commit money laundering. The news gave journalists another chance to write about Bitcoin, the Silk Road and all the money laundering, drug running and terrorism that the media tends to associate with the new currency.
The focus tends to be on the anonymity of the currency, and the way in which it allows criminals to hide their activity from both the taxman and the law enforcement agencies. It’s a great example of the way in which people tend to concentrate on the negative side of any new technology. (The amount of illegal activity that is facilitated by Bitcoin will be absolutely trivial when compared to the role that cash plays in the black economy, for example).
The privacy angle is interesting, though. We put out a press release this week, highlighting the fact that almost a fifth of internet users would like to see a cashless society. The Daily Mail picked up the story and, as is so often the case, the comments underneath the article are just as illuminating as the story itself.
Almost every comment touches on the issue of privacy. At the more extreme end of the scale, there are suggestions that ditching cash is just the first step on the way to the New World Order. But even the more measured comments talk about their fears that a cashless society would increase government surveillance, or would hand more control to the banks.
The desire for privacy is understandable. But my gut feeling is that when it comes to payments, privacy concerns are like security concerns. If payment providers can show consumers that new payment tools are measurably better than the existing options, people will quickly overcome their worries about privacy and security.
The evidence for this is overwhelming. Mintel’s Digital Trends Winter – UK – December 2013 shows that 72% of internet users had accessed social networks in the last three months. Social networks’ entire raison d’etre is to leverage the information that users share with each other, and yet people value the service enough to trade away their privacy. 63% had accessed online maps. 86% had used a search engine.
In the world of finance, people worry about the security of online banking, but the benefits to the service are compelling enough to mean that for the large majority of internet users, this is now the main means of contact with their bank.
I’m sure that the same is true when it comes to the shift towards the cashless society and, in particular, for mobile payments. Mobile wallets are much more than a replacement for a plastic card. Implemented well, they can offer a qualitative improvement over the leather wallet. No more tattered receipts, or guarantee documents lost at the back of a drawer somewhere – instead, you have an online document store. No more messing around with paper vouchers. No need to have a wallet stuffed full of loyalty cards from different retailers.
There will always be a proportion of the population who hold out. It’s going to be hard to convert someone who, as per the Daily Mail comments thread, is convinced that contactless cards are the first step to a Brave New World where every human is implanted with an RFID chip. There are still people out there who refuse to use payment cards at all, after all.
But in a world where Google and Facebook have become among the biggest companies in the world by convincing people to “sell” their privacy in return for a valuable service, it’s naïve to think that privacy concerns will be any real barrier to the uptake of mobile wallets. Get the product right, and people won’t think twice about trading away their privacy.
