[Dave Birch] A friend of mine was telling me an interesting story today, about his time working in a scrapyard when he was a student (this was back in the 1980s). The point of his story was that the business was riddled with criminality and that a lot of the metal that came into the yard where he was working was not just stolen, but transparently obviously stolen. It was a cash business and no-one cared. That was two decades ago. As the price of metals has continued to rise, I'm sure that it is still true today, as is borne out by the current scale of metal theft.
This is causing transport disruption as thieves steal signalling cable, communications disruption and people steal telecommunications cable and so on.[From Scrap it]
So what to do? Well, the government has decided to outlaw the use of cash in such transactions.
Cash payments for scrap metal are to be outlawed and fines "significantly increased" to tackle the growing problem of metal theft.[From BBC News - Scrap metal laws to be tightened to tackle theft]
There was an interesting presentation on this problem at the Smart Payments Forum earlier in the year. My friend's story got me thinking about this again. Ken Mackenzie from the British Metal Recycling Association (BMRA) was talking about the proposal to make cash payments for scrap metal illegal in the UK. The BMRA represent the responsible and law-abiding scrap dealers and it says that:
- 94% of our membership trade in cash
- over 50% of total transactions across the licensed industry are in cash,
- the average cash transaction value is £48, and
- many are for much, much less.
I thought this was really interesting, I genuinely didn't know that the average transaction size was so low. But anyway, Ken went on to point out the key concern of his members.
- non-cash transaction costs may deter trade and thus encourage black market.
This is a reasonable point to make, and Ken then asked for suggestions for a non-cash funds transfer mechanism that was
- Traceable by law-enforcement agencies.
- Cost-effective for small value transactions.
- Quick and simple to operate.
- With options to limit financial exposure in event of operator error.
I wasn't there (one of my colleagues was), but if I had been I would have shown Ken the PingIt App on my iPhone. As far as I can see, a mobile front-end to FPS solves all of his problems. To the obvious objection, which is that it would require the people selling scrap metal to the responsible and law-abiding members of BMRA to have a bank account, I would say this: good.
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