Archive for December, 2016

E-Money

Posted on: December 6th, 2016 by c4c-admin-account No Comments

The Debate

The way we pay for things has altered many times over the years depending on which culture or society it has derived from and where it is going. Currency has developed from many forms, such as leather, silver and gold. Even living animals, such as cows and sheep have been used for trade! The one thing that all of these types of currency have in common is its physical form. However, it has become apparent in the last few years that we are drastically changing our means of exchange by swapping our shrapnel for the instant contactless tap of our credit cards (and even the tap of our phones with Android and Apple Pay!) This goes hand in hand with the drastic progression of technology how it is has transformed the way we live today. We debate the pros and cons of these developments and what it means for you.

 

Summary of Development

Over the years, we have become more accustomed to the usage of money as a value on our credit cards rather than the physical cash that we have. This is not new though, as banks have been around for hundreds of years. This is where we can walk into any bank and get a statement of how much money we have stored in the account that we hold in that bank as long as we hold a legitimate form of ID. However, as technology has developed, the same principle still occurs, except we can now use cards, online banking and even our phones and watches in order to check the balance of our accounts. It has gone even further over the last decade, with people given the ability to do more than check the balance of their accounts. It has allowed us to control what goes in or out of our accounts by using a simple password and security questions to access our information.

 

Big Brother

There are many pros and cons that go hand in hand with making something as personal as our money, and how we spend it, electronic. For some people, their daily life requires the ease and speed that things like contactless payment and online banking offer. Although for some people, it can be a rather large hindrance. With the use of electronic payment, comes the record of how it is used. For many people this can be seen as a “Big Brother” economy, whereby the user is constantly being monitored on their spending pattern and cash can become suspicious. This constant monitoring can reduce crimes such as tax avoidance; however, it does pose the risk of fraudulent activity, theft and subsequently leaving many people vulnerable to their online activity being passed on to third parties. Not only is fraud an issue, but many people have a surge of marketing emails for products they don’t even want due to the way online stores share their personal information. We suggest that taking a little bit of extra time to read the fine print and un-tick any boxes that subject you to this kind of activity is one way to help you become a more savvy online shopper at a lower risk.

 

Risks and Personal Security

This poses the question of our safety and security. With cash in hand, at a store or a market, you know exactly what you are getting. Online, rather than simply exchanging money there are several steps involved that require us to enter all of our details such as, our home address, telephone numbers and sometimes even a family members name and address for extra “security”. Not only does this put us at risk of having our money stolen, it puts us at risk of having all of our personal information in the digital world where people can access it at ease. On the other hand, someone might argue that fraudulent activity has been an issue since the use of physical money with counterfeit coins and notes constantly in circulation.

 

Contactless Pay

This simple tapping method for goods under £30 has become a popular way of payment and it seems to have been received well with 81.5 million contactless cards used in the UK (as of January 2016). Apple and Android work on a similar basis of having our account details stored on our phone and tapping it against a card reader as a form of payment. There are many pros and cons to this form of payment alone, many people are in favour of its ease and speed, whilst some people simply do not trust that their cards won’t be in more danger of fraud, and other people cannot trust themselves not to overspend with such ease!

 

Financial Stability

Did you know that contactless payment is merely a promise? When a company allows us to use a credit card or contactless payment within their business, it is effectively the same as them giving us a loan and we are promising to repay it. The ability for us to access money that isn’t ours, and promise that we will pay it back is not a recent development, however it is now easier than ever for us to spend money that we may not have. When we can see physical cash, we are more mindful of how we spend it. This is because our minds can process, visually, when it is all gone then we cannot spend any more, whereas when it is a value on a screen that allows us to overdraw or borrow more money, we can easily forget the risks that come with it, for example, high interest charges. So when you are next at your local, remember to take the shrapnel beside your bed before you allow yourself to splurge on your card!

 

The Future

With the vast developments in technology more and more people signed onto online banking, “E-Money” seems as though it is here to stay. Whilst some people may be skeptical of its safety and security, these technological developments are not without great amounts of research and action in order to protect and prevent any complications of its use. Although it is simple, quick and easy, we believe that there is still a place for cash and the physical monetary form. So if you’re a little bit old fashioned, like us, and have any queries about any currency or money you may have then please contact one of our experts today.