The Audacity of Payments
How do you define audacious? I define it by way of example, more specifically, by someone who traverses the contiguous 48 states over 5 months in a well-worn Ford Escape.
Though this scribe is not too audacious, I had the pleasure of meeting up with the individual referenced in my aforementioned example. Some of you might be familiar with Bailey Reutzel, an exceptional fintech reporter who’s spent the past few years at PaymentsSource and American Banker. She’s now somewhere on ‘the road to find out’ (a la the former Cat Stevens)…chronicling the philosophy of money/value in a great blog called Moneytripping.
Bailey and I met up at our recent R2 retail conference in Chicago, which occurred just after Loolapalooza, one of the world’s best music festivals that she also attended (an interesting transition from seeing innovative acts like TV on the Radio and Alabama Shakes to seeing innovative retailers like Domino’s and Nordstrom).
So Bailey, why embark on this tour?
The concept of money and value is changing drastically—that’s part of this vast and rapidly-evolving digital currency revolution. How do people relate to money, what do they think is valuable, how do they interact with the financial system—these are topics I’ve wanted to cover for some time. I was recently at a conference in NYC and a young dad was talking about an experience he had with his kid. He gave a physical dollar to his son. His son, probably 9 or 10-years-old, knew it was a dollar, but associated paper money with charity drives at school or handing money to homeless people on the street. When it came to buying toys, he only associated plastic with that process. That’s when I started wondering how the nature of money changed between demographics and cultures.
The tangential concept I want to undertake is ‘what is value' as it relates to the ‘sharing economy.’ Take Couch Surfing, a great example of an informal economy…or Task Rabbit, an example of the odd job economy…or Lollapalooza, a volunteer economy. Each of these economies is prevalent within my generation, the millennial generation, and millennials are making their own definitions for all aspects of their day-to-day lives.
Initially, I was finding it challenging to define what I was exploring. But as I've done some research on the road, I've found a term that I think applies to what most of my reports have turned into: political economics. It's the study of production and trade and how that relates to culture and customs, the government and politics and both equality and inequality. It's a branch of moral philosophy, which I've always been drawn to writing about.
So can you talk a little about what you’re seeing, regionally speaking?
It’s no surprise that the coasts are predominantly early adopters of technology, the middle of the country…not so much. Bitcoin has a libertarian bent. The new conservative in the Midwest is a pseudo-libertarian. Early on in my travels, I came to the realization that Bitcoin and the Midwest work together—there are parallels between the beliefs in the Midwest of and the tenets of these decentralized virtual currencies.
Ah, good ol’ Midwestern ideals. Do many Midwesterners know what bitcoin is?
Many at least know about it, though it’s not pushed as heavily as it is on the coasts. Bitcoin aligns with the Midwestern contingent that is very much against government ‘spying,’ for lack of a better word.
Evoking thoughts of Edward Snowden.
You were among the earliest trackers of bitcoin and alternative currencies. What is it about virtual that’s resonated with you? Anything in particular minus what you discussed above?
I’m interested in alternatives to the status quo. Bitcoin provided that, but now it’s being appropriated. Ultimately, it’s still very much alternative. Because as Bitcoin gets appropriated, because it's open source, new alternatives can surface.
What’s your stance on tracking transactions? Where’s the line between privacy and transparency?
Millennials are seen as the demographic that doesn’t care about privacy, hence their very public social media feeds. And the idea that there are ultimate secrets is dead—many of us are more open as well as open-minded, which will lead to even fewer secrets. And that's not a bad thing.
I personally don’t care if the government wants to look at my transactions. Ultimately, I feel the government’s job is to protect us, its citizens, and so if they need to monitor transactions to do that, then I say go for it. But I see the other side. Ultimately there's a fine line between surveillance and Minority Report.
What do you think is next on the horizon, from an overall payments trend?
I think it’s all about peer the peer. Unlike in the past, where the large corporates had direct involvement, people will be able to handle all aspects of payments directly.
Do you think cash is king? Is it the king currency?
Cash will continue to be a big part of the economy. Think small corner stores, the bodegas in NYC that don’t accept cards; they’ve long been cash-only and will continue to be cash-only. They don’t want to pay fees. And consumers understand that and will gladly accept that decision.
The ‘cash is king’ mantra has come back around, and hearkens back to fiat currency as a low-cost public good so that consumers can interact with the economic system. We’ve moved away from that to an extent—with private companies and closed-looped networks operating digitally. With the rise of bitcoin and other alternative cryptocurrencies, we might find a digital equivalent to cash.
As Bailey continues her Moneytripping tour, you can follow along at http://moneytripping.com/.
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As a professional in Latin American electronic payments, I often forget how it is to live not knowing what’s going on backstage every time I use my cards. My specialization makes me aware of trends worldwide, so while traveling, I’m able to analyze different technologies in action. My consumer side, also known as my ‘shopaholic’ side, exposes me to multiple situations, since any trip—be it business or leisure—always provides a good opportunity to shop. On a recent trip, I had the chance to experiment with my Argentinian cards during a semi-long-term stay. While out of country for 40 days, I experienced first-hand the challenges that consumers encounter with the EMV payments barrier.