Future Forum | Bank of England


Tom McBride
Tom McBride | 3 months ago | in Money, Money, Money

It has been shown that people spend more with cards than cash, and more in turn with contactless than either chip and pin or cash. Surely, when considering the obsolescence of physical money, we should consider the impacts on how people think about spending, not just about the actual means of doing it. As per Marshall McLuhan, every technology changing our actions changes also our patterns of thought. The action is oft analysed, but the cerebral impact not so much. One big worry that I have is that "future of cash" (or lack thereof) will continue to erode people's sense of restraint or discipline due to the trivializing, simplifying, or altering the means of payment, in turn encouraging risky spending, debt and deficit, on personal and national scales. Is this something that the BoE has a perspective on?

Ramblingsofabard 3 months ago

A very valid point. Interestingly there is a fintech app that shrieks “meow” every time you make a payment through the app, reminding the payee that their actually spending money and harness that restraint https://thefintechtimes.com/anna-debit-card-miaows/

Believing CBDC 3 months ago

But hopefully that won't encourage or reinforce behavior of those who like meows to spend more..

Shelley (BoE Moderator) 3 months ago

Interesting app! Thank you for sharing. Oliver have you heard of this?

Oliver (BoE Moderator) 3 months ago

No I haven't! That's a very unique approach to help with budgeting.

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Believing CBDC 3 months ago

good points

Shelley (BoE Moderator) 3 months ago

Thank you for sharing Tom. Please note we have two Governor sessions - one today with Sam Woods and one on Monday for Jo Place, you can post on the dedicated pages questions.

Cornersafe 3 months ago

It will be more of a restraint on spending if the banking app on your phone informs you instantly of the remaining balance in your account. It might mean that we have to use a mobile device instead of a card. The worry I have about mobile devices is that you are never sure that you are not going to run out of power.

Believing CBDC 3 months ago

Relevant point also with more budgeting apps (such as the interesting meow app) added the battery only drain quicker. More serious question is each additional app could just spread your spending data to more servers out there.

Tom McBride 2 months ago

All very true. Payment data is extremely valuable - Tencent and WeChat in China have used online payment services data to absolutely incredible effect, while users have ended up spending more, not less, due to advertising bombardment and continued ease of payment.
App makers have vastly more to gain than users. A meow or balance update after every purchase is more likely to annoy than dissuade; the actual physical act of giving an object to pay for something is hugely more significant psychologically than any swipe or tap - however annoying or disconcerting the accompanying virtual message.

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SABP 2 months ago

I find it very odd to see people saying that they do not want the receipt when they spend by card, especially by contactless. Have they really never found an error in their statement? Or do they not even check the statement? Requiring people to take the receipt would be a minimum check (this used to be a requirement, for VAT reasons, in Italy, so it is not impossible). Perhaps each receipt should have a prominent notice saying Remember to check your statement?

Ranjit (BoE Moderator) 2 months ago

I request a receipt when making a contactless payments. I have a friend who refuses to make contactless payment and always uses chip and pin because she find this gives her an extra sense of security. It would be interesting to know how many people reconcile their statements with contactless payments without receipts.

David Fagleman 2 months ago

I think you make a very important point here Tom. It's vital that we understand the impact of technology on our daily lives as this has an impact on society. Contactless and other 'frictionless' ways to pay are designed to make the experience quick and convenient. They do this by removing barriers, such as counting the money out in your hand, receiving change or a receipt, even talking to the shop assistant, that slow the transaction down. This is generally fine but if you’re not in control of your finances, for whatever reason,then the consequences of going over the top on tap and go could be severe. I don’t know whether it’s the BoE or PSR who is responsible but a central authority should be looking into the impact/suitability of new payment technology and what can be done to offset any potential issues.

Amy Buckingham 1 month ago

This idea has been advanced to the current phase