Books written by Ray Sullivan

Wednesday, 15 May 2013

How Would You Like To Pay, Pal?

I've been a vocal supporter of the cashless society for years.  As a junior member of the RAF I think I joined it for a while, having taken a massive pay drop to follow a career in the military.  But long before Transport for London introduced the Oyster card I was boring the pants of every landlord in any pub I found myself in that a cashless payment system was what we need in this country.  To be fair, I was most vocal as my real cash reserves diminished and the alcohol levels increased.

Basically my views were, and remain, that taking a wallet out for a night in the pub is a foolhardy exercise.  Until recently most UK pubs only took cash for normal beer tinged transactions, only taking credit and debit cards for larger deals, usually where meals or bottles of champagne (for Hooray Henrys and other Rodney types - not the Sullivan household please note) were involved.  Of course we all stop off at the ATM, withdraw a sensible amount based on what we expect to pay for the night with a small amount of contingency.  This is our first mistake - we should withdraw enough to keep ourselves drinking until the pub closes or dawn, whichever is likeliest - but the optimist in us always assumes we'll stop at a sensible time.

We also tend not to sanitise our wallets before leaving, so they are full of credit cards, debit cards, driving licences and loyalty cards.  If a thief takes the wallet they have access to all the Tesco loyalty points we own.

In my world I'd like to take a single card out with me, stop off at the ATM and charge the card up with my estimate of what I expect to spend, with enough contingency for a takeaway meal afterwards.  I'm not a big fan of over-complicated passwords but in this case I would support a sixteen digit PIN - if I run out of cash and am too drunk to remember a simple sequence of sixteen numbers, some in scientific notation of course, then I really need to go home.  In the pub, and the takeaway later, I use the plastic card to pay for all my purchases.  If I lose the card then I've lost no more than if I'd lost the wallet I no longer need to carry, but still have my credit and debit cards safely at home.  Maybe I'll also keep a back-up card with enough money on to buy me a final beer and a taxi home in my sock, just in case.  The payments would be contactless and in an ideal world wouldn't cost the retailer any fees either.

Bonkers?  Probably to a banker because they like to make money every which way, but look at it from another perspective.  Thousands, possibly millions of people loading up such cards for specific and emergency needs, leaving cash on them all the time.  That's a lot of cash tied up in escrow for banks to play with, so they win with this system anyway.  At the moment no bank is offering this because they want to charge the retailers a fee for processing the deal, but what if just one bank saw the opportunity and decided to offer the facility?  Well, I reckon they would find retailers would sign up pretty quickly as there would be no reason not to and a majority of customers, the ones with cash, would migrate to their bank in droves.  Obviously the other banks would then be forced to offer the same deal, but they would have been wrong-footed by the bank that decided to implement this idea (and hopefully promote the smart banker who read my blog).  One bank would gain a lot, the other banks would be playing catch up, the retailers will see a boost to their sales and the consumer wins hands down.

And I get to keep my wallet for when I'm sober.

In the meantime PayPal are trying something similar but ultimately much more techy.  They are looking at introducing a similar point of sale process using PayPal, although I suspect they'll be looking at charging retailers for the service, but it does have some interesting features.  The main feature is that the customer registers with stores that sign up for their 'Check In' system by 'swiping a PIN on the retailer's web page', according to the article I've read.  Unfortunately the article doesn't explain exactly what this means, so I'm guessing you access the web-page and register with a PIN you've agreed with PayPal.  It may mean something else, so don't blame me if it's wrong - I've just given you a template for world beating e-commerce already and I think I made that plain enough.  I get the impression that you register with the retailer when you enter their premises, using the PayPal concept.

Anyway, once registered for the PayPal system, you tell the retailer that you want to pay by PayPal and they book all your bills to your account.  You don't sign anything, you don't pop in a PIN and you don't need a card.  You don't even need to get your phone out to swipe across a device as they will have your photo on electronic file.  And that means they can tell if it's you, even if you're so drunk you can't tell if it's you.

And that's why I think I prefer my method.


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