David Birch and I cross paths regularly and he kindly spoke to the Financial Services Club recently about the future of money.
For those who don’t know him, David is a Grade-A Geek. Not my description of him, but the description of the Independent newspaper from an article in 2004 and, judging by this photo of David, they may be right:
More like Nerd Year, but there you go.
David spoke at the Financial Services Club the other day about all sorts of exciting stuff to do with retail payments innovations. It’s his hot topic and he’s good at it, as you can tell from his blog, and if you’re wondering what David was doing at London Fashion Week then have a look at David’s write-up:
“After the catwalk show, the buyers came out into a lobby where there were large posters show each of the designs. The posters had an NFC tag in the bottom left corner and the tags were coded with an ID number for the designer and design.
“Once the posters were set up, then buyers with NFC phones could touch the designs they were interested in and have a picture of the design and some other details automatically added to a 'shopping list' on their handsets. This shopping list is later sent back to the designer.”
How luvverly dawling.
David is always at the forefront of innovations in this space.
This was evidenced when I said to him that contactless in the UK was not going to take off until there's a critical mass of contactless reading terminals and, after Chip & PIN, that’s going to be an issue as merchants don’t want yet another terminal.
David goes “aha”, whips out his phone and reads my Barclaycard contactless chip using his mobile.
“See that”, David chirrups. “Any mobile phone can be a contactless reader using simple software like this, and then you end up with lower cost payments again using mobile technologies.”
How very, very luvverly dawling.
So David delivers his speech and gets into making some predictions.
The first prediction is that cash will die.
Here’s what David said:
If you can’t listen to that, then it’s basically that a sterling £20 note costs about £0.0001 pence to print and distribute, and has no backing in actual value other than the promise of the government that it is legal tender.
In other words £19.9999 pence of every £20 is just profit to the Bank of England and, because these notes are backed by Government Bonds, the result is that cash generates interest that is worth about £2 billion to the Treasury. If you abolished cash, then the UK government would have to find £2 billion to fill the gap.
That’s about £300 per annum per person that Brits would be net worse off if we didn't have cash.
No wonder cash lingers around for so long.
If you're interested, I wrote a series of articles about such things a year ago.
The real point David came up with about the future of money is that it will not change until you focus upon the right things.
And what are the right things?
Girls, games and gambling.
You see, money is wholly directed at enabling society to enjoy things, particularly things like girls, games and gambling or sex and drugs and rock 'n' roll if you prefer.
This is currently being evidenced by virtual worlds such as Second Life.
Second Life became popular due to a variety of factors, but girls, games and gambling lay at the heart of it.
Second Life was a game, it connected people, and it grew phenomenally through a Wild West of sex and gambling ... but then George W. outlawed gambling.
Result: all the money disappeared out of Second Life, the monetary systems collapsed and the game became far less fun.
A few million people then left Second Life but virtual worlds are still growing, fuelled by games, gambling and girls, as evidenced by Utherverse, a virtual world of commerce driven explicitly by sex.
Bearing in mind that money was invented for sex, and to create control over society through entertainment, isn't this the real role of commerce and cash?
To allow us to be hedonistic and self-indulgent.
From the vestal virgins and the goddess Ishtar in ancient Sumeria, to gambling on horses and chariot racing in ancient Rome, money's foundations are firmly in girls, games and gambling.
And if you take girls, games and gambling out of the equation – and associated things like drugs, rock and roll, alcohol and more – then what are you left with?
Why do you work?
To get money?
Why do you need money?
For girls, games and gambling.
It’s the essence of life, and money fuels that essence.
And, as our celebrity culture demonstrates these days, the more you have of it, the more you can indulge in that essence, the more hedonistic you can become.
Apologies for being so bold as to lay this bare, but either like it or lump it it's the truth.
And, if you want to know the future of money, all you need to do is to find the next wave of girls, games and gambling.
I must admit, David only discussed this for about a minute, but it was my favourite bit of his speech so I've just embellished it a bit. Meanwhile, David’s full speech is available as a podcast to Financial Services Club members, including remote members via the net.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...