The E-Sylum:  Volume 10, Number 42, October 21, 2007, Article 22

THE INDEPENDENT ON THE HISTORY AND FUTURE OF MONEY

On October 16th The Independent published a long and
well-written article on the history of money.  Here are
a few excerpts, with a focus on the future on money.

"Primitive Banks

"At this stage there were no coins. Instead, the value of
metal was judged by its weight. The legacy of this can be
seen in words such as the English 'spend', which is derived
from the Latin verb expendere, meaning 'to weigh'.

"The launch of the Barclaycard in 1966 (and its now defunct
but long-running rival Access in 1972) was the start of
"plastic" – the discovery that a small rectangle of
polyvinylchloride (always measuring 85.60 by 53.98mm)
could transform your life.

"E-money: the future of cash

"We may not be that far away from a world where cash
follows the chequebook into oblivion and few transactions
are conducted face to face. There are in excess of 20
billion payments of less than £10 made every year; they
could all go cashless.

"E-money comes in three forms, two of them specifically
creations of the internet. First, there is the "card not
present" phenomenon, where you have sufficient faith in
the online retailer – nowadays, anyone from Tesco to
Amazon and lastminute.com – that you feel happy to tap
your payment card details on to a web page. You and the
"shopkeeper" never actually meet, and you never leave
your home or office.

"Money thus moves from being a physical commodity – a gold
coin, a paper banknote or a plastic card – to being a purely
virtual commodity (though of course banks themselves have
long held your current account in virtual form, as a series
of binary codes in a computer file).

"Second, we have seen the growth of outfits specifically
set up to facilitate payments on the web. Perhaps the most
high-profile of these is PayPal, as featured, and trusted,
on eBay. Barclays Bank can chart its origins back to 1685,
the Royal Bank of Scotland to 1727 and Lloyds to 1765;
PayPal dates back only to 2000, yet it now operates in 103
markets, manages more than 133 million accounts and allows
customers to send, receive and hold funds in currencies
from the US dollar to the Polish zloty.

"The real revolution, though, may be the abolition of cash,
cheques, credit cards and debit cards and their replacement
by one single means of payment which you just wave, possibly
nonchalantly, at the shop assistant. This is what the
'contactless' card promises, so called because you don't
even have to put it into a reader to buy something.

"The Barclaycard OnePulse card, for example, was launched
only a month ago, with 4,000 guinea-pig customers in London.
It will combine the functions of an Oyster card (Transport
for London's existing "cashless" method of prepaying for
bus and Tube journeys), a Barclaycard, and a "One Touch "
contactless technology card.

"This is the novel bit. It allows cardholders to make
purchases of £10 or under more quickly and conveniently
with a single touch of their card against a reader instead
of entering a PIN or signature, thus reducing the need to
use and carry cash.

"The first six sections of this article are from Minted:
the story of the world's money by Johnny Acton, published
by Think Books on 31 October. To order a copy (free P&P),
call Independent Books Direct on 0870 079 8897 or visit
www.independentbooksdirect.co.uk "

To read the complete article, see: Full Story

[I used an Oyster card daily on the London tube last summer.
It was very convenient to use. As the article states, it worked
on both the subway and bus systems.  It did not work on other
trains, which are owned and run by a different organization.

That's always the rub with new currency solutions - interoperability
and acceptance by other organizations.  The Barclays OnePulse
card takes that next logical step.  By marrying the ATM card
with touchless micropayments, it could well be the true future
of money for the rest of this century.

In the U.S., there are relatively few uses of touchless
monetary transactions.  One example is the "Speedpass"
available to Exxon gas station customers.  Being able to
use a single card for such transactions would allow the
technology to become ubiquitous.  Stay tuned - I think this
is one idea that has legs.  -Editor]

  Wayne Homren, Editor

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