Everyone in my world knows that I am as old as Methuselah, except Waitrose . As I pass around the store zapping the barcode on my groceries , I know that the wine and beer , when I reach the pay station , will trigger a call for a human staff member to visually categorize my grey beard as ” licensed to drink alcohol ” . This petulant annoyance at a petty delay resurfaced in my mind while reading Dave Birch’s excellent new book , ” Identity is the New Money ” ( London Publishing Partnership ” Perspectives ” series , 2014 ISBN 978-1-907994-12-8 ) . This should be in the travel bag of every information marketplace manager this summer . It is the very best restatement I have seen of the arguments supporting the idea that the credit card is about to diminish in influence , and that as soon as it has been replaced by identity resting upon the smartphone mobile wallet , cash will rapidly follow it too . And that mobile wallet , an API generating activity , not an app , is fundamentally about our identity management and the way we express our identity . Birch’s thesis now has real credibility , and he is able to illustrate it with case studies from around the globe . His new world bears no resemblance to the things that he used to talk learnedly to me about 20 years ago . Then we speculated ( or he speculated and I listened !) about Mondex and its ilk . A whole generation of software never flowered – until the Smartphone , key change agent here as elsewhere , came along .

The classic of them all is now M-PESA , the cash-and-cardless system which has been so successful in Kenya . Run by the mobile phone operator Safaricom ( part owned by Vodaphone who are also the operators elsewhere in East Africa ) this has become the lifeline money transfer system for much of the region , a way of creating country-city transfers that branch banking could not effectively accomplish , and a way of establishing identity , and with it trust , where it was difficult , outside of village society , to establish it before . But , as Dave Birch makes clear , there will be losers as well as winners . The Mobile Wallet could well take banking out of payments – leaving banks simply as a part of the lending cycle ( and not the most lively there , either , if his comments on Zopa and its rivals are borne out in time) . And then what happens to credit rating in the transactional data slipstream of mobile wallet transactions . Our record will , so to speak , speak for itself . I have argued for a long time that the “big” data risk to credit rating is much greater than the opportunity – it exposes the low value-add of much of the current marketplace – but here I can see a real possibility that rating could become a mobile wallet application very easily indeed . He finds much to admire in PayPal’s increasing incursions into physical commerce , and joyfully lays into the idea that Bitcoin is the answer because of its anonymity . Indeed , like cash it has a degree of anonymity , but this comes about because the log of exchange only indicates ownership to an encrypted key . Anyway , cash seems to me more corrupt than not ( though I had to smile at his stories of adult services vendors in the US using Amazon gift cards as currency with complete anonymity – what a brave investigator this man is !) His insight however on the future of cash is surely sound – we will replace it with thousands of exchangeable objects that are useful or desirable to each individual : ” Here in London we already have the Brixton e-pound . The Local Exchange Trading Systems ( LETS) from physical communities and the platinum pieces and Facebook credits from virtual communities will surge and merge , forming a panoply of private currencies that will make trade more efficient . Why save dollars for your retirement when you can save kilowatt-hours or calories ?”

Even a selective and space – constrained discussion of the book demonstrates that there is much here for anyone who aspires to trade on the network – even if you are trading data or information . What is harder to convey is that this short book is densely packed with argument ; written , praise be , in English of a straightforward and intelligible sort ; has every technical concept explained , and has a breezy and enjoyable good humour that typifies the author himself . Small wonder that he is one of our most revered Telco and payment systems consultants . I can also add that when cash and the credit card follow the cheque into the network twilight , we shall not be publishing books like this at all, and it is no surprize to see how much of this came from Dave’s blog ( http://tomorrowstransactions.com ). And now I have to go – the car is on a parking meter and , having already used the parking app ( universal now in a London where meters are diminishing – since no one has cash enough) to increase my time allowance remotely I have now exhausted that allowance as well as my readers .


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1 Comment so far

  1. Dave Birch on June 8, 2014 16:00


    Thank you for the kind words. You are spot on about why we were wrong in the early 1990s. We were able to get the cards out, but getting the terminals out proved a massive barrier. The smartphone changed everything, because it can be a terminal as well as card.

    We used to think that cards would get rid of cash, now we know that phone will get rid of cards and cash will hang on for a while !