Yesterday I found myself in Bangkok speaking at Total Payments Asia, where the discussion around industry ambitions for a cashless society and financial inclusion took an interesting turn. As we talked our way through solving both the cashless ambitions and the social good of financial inclusion we realised that there is a common thread amongst these two that could solve the 'There's no money in mobile money' debate. It's an intriguing question. But it has a simple answer: no!
Leave aside for now the fantastical prospect of an actual, society-wide end of cash, with all the vast implications for economic policy, on the unbanked, etcetera, that would entail amazing theoretical benefits. On a personal level, as we race headlong into the era of "frictionless spending" – in which waving goodbye to another $10 is as simple as a single click on an iPad or Kindle – there's a strong argument for starting to use cashless much more in our daily lives. As the behavioural norm shifts away from cash.
The insight we found is that is the majority of cases, in South East Asia, the highest daily need for cash is buying food. Specifically food when we are away from our residence, mainly lunch. Whether it's Chicken Rice in Singapore, Nadi Padang in Indonesia or Pho in Vietnam, paying for lunch is a daily need that requires cash. For the large majority of the working population, they don't eat at chain restaurants that have POS devices, leaving us with no choice but to carry cash.
If we found a way to equip small street vendors and food courts across the region with 'cashless' programs that were actually simple to use, affordable to deploy, and didn't have major dependencies on new infrastructure, we would be well down the path of creating money ecosystems that could also address the inclusive needs of those that don't have access to basic payment services. Hopefully creating a tipping point affect that could alter the direction of cashless initiatives globally. It's not a perfect fit, but it would be a huge leap forward from where we are today.
The key insight here was that the technology, the regulation and the infrastructure add little value to the notion of utopian cashless ecosystems as the genuine alternative to cash. But when they are tackling real world problems, these systems often trip up as they try to find feasible scale while cash remains king. Kind of a chicken and egg scenario. We all know the universal gains of going cashless, but getting there has some serious challenges. So the insight I take away from Bangkok is the way to the heart of cashless is through our stomachs.
Granted there are some short falls in this approach, but its a great way to adjust our mindset when building business, creating cashless ecosystems and striving for financial inclusion.
Would you go cashless if you could buy lunch without it?