[Dave Birch] We need to have a narrative about what the future will be so that we can share in creating it. I've heard more than one conference speaker refer to the way in which "Star Trek" guided the evolution of the mobile phone industry and one conference speaker (me) refer to the way in which "Dr. Who" will guide the evolution of the digital identity industry. There's a great paper on this called "How the Future Shaped the Past: The Case of the Cashless Society" by Bernardo Bátiz‐Lazo (Bangor University), Thomas Haigh (University of Wisconsin, Milwaukee; The Haigh Group) and David Stearns (Seattle Pacific University). It sets out to explore the relationship between the narrative and organisational strategy.
This paper invites readers to look into how beliefs about future events help to better understand organizational change. Our argument is that the adoption of information technology and the adoption of new organizational forms around it have been driven by shifts in collective ideas of legitimate organizational development. As an example we focus on the establishment during the 1960s of a vision within US retail financial services, namely of the “cashless/checkless society”. The article tells of the power of this “imaginaire” to bring consensus in driving actual technological developments.
I'd never heard this word before, but I love it. An "imaginaire" is an imagined new social order built around the deployment of an emerging, unproven technology in a particular way. It's not quite the same thing as a vision, as I understand it, because an imaginaire requires more detail, more understanding of how the technology will work and how interacting with it will change the society in which it is embedded. Naturally, this appeals to me. I'm the sort of person who, when they read in the paper that the government is going to install black boxes to monitor all internet traffic, starts wondering how they will work before I start wondering about the implications for civil liberties, taxpayers and novelists.
The reason why I was looking at this paper was that I was preparing some material for a client workshop and I was looking at why people who were in favour of spending money on the development of a card business in the 1960s were in favour of it, and why those against it were against it, if you see what I mean. Reading through the paper, I came across this succinct statement, which I immediately recognised to be a fantastic reflection on the state of mobile payments ahead of my evening out chairing Mobile Monday in London. The authors say
Successful innovation therefore depends, implicitly at least, on convincing others of the existence of a future in which the innovation is already accepted.
I'm already convinced of a future in which mobile payments are part of the mass market -- I'm already curious about the imaginaire (e.g., the rise of alternative currencies on the mobile money platforms) -- but how can I share that with other people? Are mobile payments part of the conventional wisdom, or only for people like me? Is it simply too soon to be talking about this?
A recent survey of more than 1,000 technology experts conducted by the Pew Research Center’s Internet & American Life Project and Elon University predicts that by 2020 “mobile payment systems” will gain mainstream acceptance as a method of payment and could largely replace cash and credit cards for most online and in-store purchases by smartphone and tablet users.[From Latest Pew Research Survey Predicts Decline of Cash, Credit Cards by 2020]
Of course I agree with this bullish prediction. To me, it seems obvious. The more interesting question is what form mobile-centric payments will take. Taking William Gibson to heart -- the future is already here, it's just unevenly distributed -- where can we look around to see plausible candidates for the mass market mobile payments solutions for 2020? And would be even able to see them now? Did people understand how, for example, payment cards were going to pan out?
Within a five year period from 1965 to 1970 the checkless-‐cashless future had passed from a somewhat marginal speculation to a taken for granted part of the industry’s conventional wisdom. No such payment system was in commercial operation, or had been proven in a pilot study of more than trivial scope. In fact the technology to realise the vision did not yet exist, as a series of failed projects in the financial industry during the late 1960s and early 1970s would demonstrate.
This is where we are with mobile payments today, isn't it? Mobile payments are now taken for granted as being an integral part of the future landscape. I think we've gone further than pilots in some areas, but nevertheless the point is that we can't point to France or the USA or Germany or anywhere except Kenya and say "look, mobile payments are an incredible success, they are the future".
There’s no tangible, proven way to get any return on investment for the implementation. So why do it? Credit cards are ubiquitous. Credit cards are fast and easy. Almost all merchants have the ability to process payments via credit card. So why? Why are we solving a problem that doesn’t exist?[From NFC Is Great, But Mobile Payments Solve A Problem That Doesn’t Exist | TechCrunch]
That's a perfectly valid perspective: but remember that people were sceptical about plastic cards once. Until the early 1970s it was not at all clear that the main mechanism for cashlessness would be the plastic card. The invention of the magnetic stripe changed everything. In time the mobile phone will have as much impact as the magnetic stripe, but in a very different way. For one thing, an online world entered through the mobile handset does not need the same kind of standardisation that the magnetic stripe world did. Back then, it made sense to coalesce around a Visa and a MasterCard, because not every shop was connected to every bank and not every shop was connected to every consumer. But now they are.
our world is complex and only ‘one’ mobile payment platform is not enough[From Mobile Payments: A Trillion Dollar Industry… Once Everyone Can Actually Make A Payment | TechCrunch]
A sound insight, and I couldn't agree more with this. Given the new technology, there is no need to have a single universal system any more. My mobile wallet will be more than capable of choosing between multiple different payment methods to select the one that is most appropriate in any given transaction.
There are two big and interrelated questions about how people will behave when they start using electronic wallets on a large scale. The first is whether they will consolidate all their spending into a single account or spread it even more widely than they do now. The arguments seem finely balanced. Those who expect spending to be consolidated reckon that when people are no longer faced with a physical choice, they will simply use whichever card or account has been set as the default. Those who think that spending will be spread more widely point out that phones eliminate the inconvenience of carrying around a lot of different cards, which may prompt some consumers to have more banking relationships.[From Mobile payments: A wealth of wallets | The Economist]
On balance, I come down on the latter side, largely because I think that wallets will be shaped more by the retail experience (which varies greatly from environment to environment) rather than by the payment experience. But I don't know enough about the future of retailing to construct a narrative around that. Some people try to do it by looking at Japan. While I always make a point of saying that the Japanese mobile payments market is special and not a template for the UK (or, for that matter, the US) it is nonetheless interesting to see what is going on there. The latest survey results I've seen (from the end of March), about a third of iPhone, Android and other smartphone users say that they have already used "electronic money" system and another 12% say they are planning to use them. Note, though, that the iPhone doesn't currently have the electronic money (i.e., NFC) interface, but (and I'm paraphrasing a machine-assisted translation here!)
28% of respondents said that when an “iPhone equipped with electronic money function released" they will consider replacing their current handset with it… so it was confirmed that the presence or absence of the electronic money interface is a selection criterion when buying smartphone.[From Japan Mobile Payments Survey by Wireless Watch Japan]
Again, I'm paraphrasing a machine-assisted translation.
Of the people who have used electronic money, 73% have used Edy, 37% Suica and 27% nanaco. Where do they use their electronic money-equipped mobile phones? Predominantly at convenience stores (73%), vending machines (48%), transit (37%), fast food 34%. These electronic money systems are all prepaid and 51% of people load them from payment cards, while 39% load them in-store by handing over cash.[From Japan Mobile Payments Survey by Wireless Watch Japan]
The survey also says that 36% of smartphone users pay with mobile money at "Regular Kip", but I couldn't figure out what this meant - can any correspondent help? I would love to have regular kip as part of my imaginaire. By way of contrast to the Japanese figures, American figures would appear to support the sceptics.
The ability to make mobile payments is "very unimportant" to about half of credit card customers with smartphones, Lightspeed found. Only about 15% of the customers surveyed said it was somewhat or very important to them to be able to pay with their smartphones.[From Mobile Payments Very Unimportant to Consumers - American Banker Article]
You have to wonder about this sort of thing. Are these real insights? Almost no-one in the US has ever used their mobile phone to pay for something in a shop, so why anyone would ask them about it isn't clear to me. These results don't mean that mobile payments will fail in America, they mean the general public has no narrative about mobile payments, and I hope to change that (although I don't know how yet).
By the by, the paper is particularly fascinating (to me, at least) because it touches on something that I've written about several times before but in a way that begins to explain rather than merely observe.
In contrast, the vision of a “cashless society” appears to have originated within the world of business and moved only later into the realm of fiction.
A few years ago I had the good fortune to bump into the author Bruce Sterling, who was kind enough to let me interview him for our podcast series. In the interview, I asked him why the future fiction about money was so unimaginative (it doesn't seem to go further than the "galactic credit"). He said it was because it was boring. Indeed the authors observe that
On the other hand, readers and writers of science fiction were perhaps more interested in rockets and physics than they were in banking, economics, or organisational innovation. When a fictional society was cashless it was generally also a moneyless utopia
So what is the narrative vision for the future of payments that we can all share? If there is one, I suspect it's more about biometrics than mobile phones.
P.S. The Munich paper notes that the phrase "cashless society" appears to date from 1958 although the concept is, of course, ancient. See for example, Edward Bellamy's 1888 sensation "Looking Backward 2000-1887":
Yet the book has special place in my canon because the time-traveller is told by his host, the good Doctor Leete (who has a daughter called Edith: E. Leete, geddit?), that there is no such thing as cash in the year 2000.[From Digital Money: 1886 and all that]
P.P.S. It also refers in passing to management consultants creating "expert knowledge and client ignorance" to promote their services. That's not imaginaire, it's marketing, which is different.
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