Mobile Payments Are Eating The World

“Will that be by cash, credit, check … phone or watch?”

Francisco Gonzalez, BBVA Bank chairman, predicts his bank’s chief competitors in the future will not be the likes of Chase Manhattan, Bank of America or J. P. Morgan, but software behemoths like Apple, Samsung, Google and Amazon. The new emphasis, he says, is in mobile payments. “Mobile has emerged as the driving force for disruptive innovation in banking,” he said at the Mobile World Congress in Barcelona the first week of March 2015.

He should know. “The number of BBVA mobile customers has increased 14-fold in three years and totaled 4.3 million at the end of 2014,” he reported.

Not Your Grandpa’s World Anymore

“The days of carrying wads of cash and paper check books are quickly fading,” reports Nielsen Newswire in December 2014, in a post: Digital Money Management: Millennials and Boomers. “The world has gone digital, and payment methodologies are rapidly gaining prominence among savvy consumers.” The report goes on to say that these “savvy” consumers do “live with their smartphones, which means their high ownership rates could be a key to future use” in the mobile payments & banking industry.

Interesting enough, according to Nielsen, leading the pack in the digital, mobile payment revolution is the generation on whose watch the whole thing got started … the Boomers, who are now today’s senior citizens.

“The vast majority (92%) of mass affluent Boomers indicate online banking is their preferred channel for paying bills,” Nielsen reports. Comparatively, “about two-thirds (65%) of mass affluent Millennials pay bills online.”

Mobile Diginomics to Replace Physical Money?

In a Pew Research survey released on May 6, 2015, 64% of U.S. adults own a smartphone. 57% use their smartphones for online banking services. Fifteen percent claim to “have limited options for online access other than a cell phone.”

Even more succinct to the “Diginomic Age,” in 2014, according to, mobile app usage accounted for “half of all U.S. digital media consumption” and, in March of 2015, “the number of mobile-only adult Internet users exceeded the number of desktop-only Internet users.”

“Mobile transactions are estimated to reach $670 billion within about three years. Digital goods are expected to comprise about 40% of this digital market,” says “In an ever-changing technological world, physical money and credit or debit cards may become obsolete. Easy to lose and easy to have stolen, these ‘old-fashioned’ ways of paying for goods and services may be going the way of the older trade systems.”


The Transformation of Money

diginomics (noun) : (dij’i-nom’iks) [digital + economics] the technological and social development toward an all-digital economy conducted electronically in all financial dealings between buyer and seller; a cashless society where all financial transactions are conducted electronically.

Merriam-Webster Online Dictionary

Joel Kurtzman, chairman of the Kurtzman Group, in his 1993 book, The Death of Money, called the new currency “megabyte money”, saying it was (and is) “an entirely new form of money based not on metal or paper, but on technology, mathematics, and science … This new megabyte money is creating a new and different world wherever it proceeds.” This former Executive Editor of Harvard Business Review and current business book reviewer for CNN, noted that “money now is different … It is no longer a thing … it is a system. Money is a network. Few people realize that money, in the traditional sense, has met its demise. Fewer still have paused to reflect on the implications of that fact.”

The “New Money Factor” of diginomics covers an extremely large spectrum to include not only the issue of currency being digitized, but every aspect of economic lifestyles today. It addresses both “how” we shop and “where” we shop. It’s how we spend our money and the electronic environments of that experience. Are we using cash, checks, and coins, or are we totally cashless? The popular yet controversial series of commercials by Visa in which the arterial flow of cashless shopping is stymied by the user of cash depicts both the reality of our times and a trend into the future.

The January 29, 2007 edition of Information Week notes that, “A generation is growing up hacking and slashing their way through virtual worlds, and they’re going to expect a 3-D, virtual interface for the rest of their online interaction.” Later, in the April issue, IW went further to say of this new generation of shoppers, “Now they want everything at Internet speed.”

The International Business Times of London headlined in its November 24, 2011 edition that the “Next Generation to be Born into ‘Cashless’ Society”, stating that “Today’s younger generation will trade in their cash, credit cards and cheques for mobile digital wallets by 2016. Children born today will be Britain’s first cashless generation and will frequently use their smartphones in exchange for goods and services.”

The Digital Economy continues to chase the heels of the Tangible Economy (where cash has long been king throughout history), getting ever closer to parity since its inception, ever reaching for predominance. Dr. Peter Bishop, the University of Houston’s “professional futurist” professor who oversees that school’s Studies of the Future program, calls this the era of “The Intangible Society”.

In a white paper entitled The Waves of Creative Destruction: Technology Past, Present & Future, Dr. Bishop declares, “We should not call it the information society because it is more than information. It’s also communication, finance, education, entertainment. I propose instead that we call it The Intangible Society—the first industrial society to offer breakthrough productivity on purely intangible products and services.”

Don Tapscott, in his classic book, The Digital Economy [© 1996, McGraw-Hill] has an equally interesting term for the new digital era: “the Age of Sand.”

“The new economy is a digital economy,” he writes. “The new age could be aptly dubbed the age of sand. The affairs of commerce, business transactions, human communications, and the insights of science are all reduced to charges on particles of silicon or racing through glass fibers, both derived from sand.”

In an era when books, movies, music, and newsprint are transmuting from atoms to bits, money remains irritatingly analog. Physical currency is a bulky, germ-smeared, carbon-intensive, expensive medium of exchange. Let’s dump it!

– David Wolman, WIRED, 17.06; “Time to Cash-Out: Why Paper Money Hurts the Economy

“Money is now an image,” writes Kurzman in The Death of Money. “Simultaneously, it can be displayed on millions of computer screens on millions of desks around the world. But, in reality, it is located nowhere and needs no vault for safekeeping. Yet, while money has no real location, it has created an environment that is paradoxically everywhere while taking up no physical space … A community where neighbors, colleagues, and competitors are accessible only through electronics.”

This is part two of a three part series on our diginomic world by Wallace Wood. Read part one & part three.