epassporte: The Future of Money
We’ve come a long way from seashells and colored beads.
When the de Medicis invented banking in the 14th Century, they veered us irrevocably into the realm of the abstract.
“Value” remained valuable, even in theoretical, projected circumstances, and risk analysis was born. With it, the concept of interest, and — miraculously — so was born the way to make money on money.
The effects of credit on our lives remains a divisive subject. Being able to borrow against value can make your dreams come true. But it can also wreck your life.
But this is not about credit.
Money and economics have influenced every aspect of our lives, since long before the advent of the Web. In the beginning, electronic commerce enjoyed the pre-existing electronic infrastructure of the credit card networks. It was a great fit. Some XX billion dollars changed hands that way in 2005 on planet Earth.
To pay for something online with a credit (or ATM) card has become synonymous with electronic commerce.
But something’s wrong.
When money went digital, a funny thing happened. Suddenly, you needed to have Institutions and “parties” of various types sitting between buyer and seller. In our excitement to “buy online”, we all said “Yeah, yeah… sure, sure“, we signed on the no-longer-dotted line, and we were good to go.
But, when we put, essentially, our “bankers” between ourselves and our transactors, we seem to have imported the expectation that they are somehow still “responsible” for our money. Banks have always been beholden to depositors. But, before the advent of credit, it was always the customer who had cause to worry about the bank. Now, that’s mostly all reversed. I’m going to assume the banks prefer it that way. We spend our lives in debt, chasing superficial dreams, paying exorbitant interest rates and fees just for the pleasure of being scolded like a child by the Walgreen’s cashier because you are over your limit.
Gone is the simple right to spend your money as you see fit, with privacy.
Gone also is the sense of responsibility in the consumer. Because we know we can tear-up the bill or chargeback, many of us do… with an alarming frequency. Factor deliberate fraud into that and you have a number for total negated transactions of about XX billion per year. And who eats that? You guessed it, the various Institutions and “parties” that sit between buyer and seller.
Because these losses are real, the Credit Card Companies have had to evolve in response. A few years back, I read in the Economist that the notion that creditworthiness is what drives the credit card companies couldn’t be farther from the truth. And I’m sure lots of people think that it’s all about making sure that only the most credit worthy people get credit.
Hmmm. Well, let’s think about that a minute. People who pay the full balance every month just don’t generate a lot of income. Okay, enter Mr. VP of Marketing:
“Getting credit will be held up as a high accomplishment. It’ll feel like such a reward… and such a VALIDATION AS AN AMERICAN… that they’ll pretty much do whatever we say. We’ll squeeze them one after another, like lemons… KACHING!”
You might say, well who cares… a sucker is born everyday, and a fool and his money are soon parted. The credit card companies have every right to serve a market that appears happy to be served. But there is a harm in all this, in my opinion.
When you place your money on the counter in the deli, it’s rather definitive. When you drop your wallet on the subway, that’s definitive. The fact that hard currency can be lost and stolen makes a great case for more “secure” methods of value transfer. Everyone imagines that the credit card companies are taking care of this. Sure, there are lots of PINs and passwords in our financial lives, but the credit card companies are concerned primarily with their precious margins. They are too busy extorting “protection money” from both consumers and merchants for a security that never materializes.
But I do not blame the credit card companies alone, for the sorry state of things.
Consumers have gotten it into their heads that there is somehow a vast gray area, where sometimes you have to pay for things and sometimes you don’t. I can’t imagine anything more perilous for electronic commerce than that.
We need something different.
The naked opportunism and advantage-taking of PayPal (not to mention the fact that everyone in America has a horror story), disqualify them even from mention.
I think it’s a good time to mention that this is NOT a paid endorsement. I am about to acquaint you with a company that I believe is doing exciting things with regard to the above. I am just a satisfied customer. I will stop short of telling you what they do and how they do it.
They have some wonderful marketing on their site for you to discover. Allow me to introduce epassporte, The Future of Money.
See also epassporte marketing.