The PAYTECH Book

Payments are Getting Political Again

By Bill Maurer

Dean of the School of Social Sciences, University of California, Irvine, CA

In the USA, more and more retailers are adopting a “no cash” policy, only accepting payments by card or mobile phone. Sweden has long been touted as a country on an inexorable march towards becoming a “cashless society”. In both countries, however, policy-makers are starting to worry about the impact of cashlessness on the public good. Some states and municipalities have even taken up the cause of cash, arguing that refusing cash unfairly excludes the un- and underbanked from everyday commerce, and disproportionately impacts the elderly and recent immigrants. Some of them even see Indian Prime Minister Narendra Modi’s demonetization of high-denomination rupee notes as a cautionary tale. It sparked panic across the country during November and December of 2016, as people sought to exchange old notes for new, while the existing digital payment infrastructure was unprepared for an influx of new users.

Meanwhile, mobile app-based payments have swept through China. Alipay and WeChat Pay provide all-in-one suites of services, allowing users to purchase short-term bicycle rentals, order food delivery, buy movie tickets and even get fashion advice, and pay within the app or via QR codes scanned by the phone’s camera. These companies have pioneered new ways to bridge the divide between the physical world and online or mobile interactions. Alipay can send near-instant ...