{"id":2200,"date":"2015-05-27T22:51:34","date_gmt":"2015-05-27T22:51:34","guid":{"rendered":"https:\/\/courses.candelalearning.com\/masterybusiness1xngcxmaster\/?post_type=chapter&p=2200"},"modified":"2019-01-05T01:41:27","modified_gmt":"2019-01-05T01:41:27","slug":"2200","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wmintrobusiness\/chapter\/2200\/","title":{"raw":"Reading: Alternatives to Traditional Currency","rendered":"Reading: Alternatives to Traditional Currency"},"content":{"raw":"Whoever said that \"cash is king\" hasn't been paying attention to how consumers choose to pay for their purchases, particularly in developed economies. Take a look at the following chart:\r\n\r\n\"Pie<\/a>\r\n\r\nIs a cashless future in the cards? A 2013 MasterCard report found that, in 2011, cashless payments made up 66 percent of global spending.\u00a0Consumers in Belgium, France, and Canada used cash the least in 2011, as cashless payments made up 93 percent, 92 percent, and 90 percent of payments respectively. In the United States, 80 percent of payments were cashless in 2011.\r\n\r\nConsumers expect to make fewer cash payments in the future, while also cutting back on credit- and debit-card use in favor of other forms of payments. In an Accenture survey, 66 percent of North Americans said they used cash daily or weekly in 2014 while only 54 percent expected to do so by 2020.\r\n\r\nMoney is an abstraction built on trust. As such, alternatives to the most tangible\u00a0form of money\u2014currency or cash\u2014and its replacement with cashless payments have become possible. In this new emerging landscape, no transac\u00adtion requires money in the form of notes and coins, and value can be exchanged through the transfer of information between transacting parties. There have been multiple waves of such alternatives.\r\n\r\nEstablished alternatives\u00a0to cash include checks, credit cards, debit cards, and prepaid debit cards. More recently, innovative options\u00a0have sprung up that not only threaten to imperil the ubiquity of cash but also upend the traditional payment\u00a0ecosystem. These include smartphone-enabled credit-card acquirers, such as Square, and Automated Clearing House or ACH acquirers, such as PayPal and Dwolla. And then there are even more ambitious alternatives to cash that have been proposed, such as Bitcoin, a Web-based cryptocurrency.\r\n\r\nUnlike traditional money, such alternatives do not derive their value from government fiat\u2014i.e.,\u00a0the government has not established their legitimacy or value<\/span><\/span>.<\/span> Each of these alternatives has\u00a0an evolved network within which it is\u00a0uniformly accepted as a means of payment; the more established\u00a0alternatives, of course, have the widest networks.[footnote]Chakravorti, B., & Mazzotta, B. (2013, September). The Cost of Cash in the United States. Retrieved September 8, 2016, from http:\/\/fletcher.tufts.edu\/CostofCash\/~\/media\/Fletcher\/Microsites\/Cost of Cash\/CostofCashStudyFinal.pdf[\/footnote]\r\n\r\nWe will examine this trend further in the next readings.","rendered":"

Whoever said that “cash is king” hasn’t been paying attention to how consumers choose to pay for their purchases, particularly in developed economies. Take a look at the following chart:<\/p>\n

\"Pie<\/a><\/p>\n

Is a cashless future in the cards? A 2013 MasterCard report found that, in 2011, cashless payments made up 66 percent of global spending.\u00a0Consumers in Belgium, France, and Canada used cash the least in 2011, as cashless payments made up 93 percent, 92 percent, and 90 percent of payments respectively. In the United States, 80 percent of payments were cashless in 2011.<\/p>\n

Consumers expect to make fewer cash payments in the future, while also cutting back on credit- and debit-card use in favor of other forms of payments. In an Accenture survey, 66 percent of North Americans said they used cash daily or weekly in 2014 while only 54 percent expected to do so by 2020.<\/p>\n

Money is an abstraction built on trust. As such, alternatives to the most tangible\u00a0form of money\u2014currency or cash\u2014and its replacement with cashless payments have become possible. In this new emerging landscape, no transac\u00adtion requires money in the form of notes and coins, and value can be exchanged through the transfer of information between transacting parties. There have been multiple waves of such alternatives.<\/p>\n

Established alternatives\u00a0to cash include checks, credit cards, debit cards, and prepaid debit cards. More recently, innovative options\u00a0have sprung up that not only threaten to imperil the ubiquity of cash but also upend the traditional payment\u00a0ecosystem. These include smartphone-enabled credit-card acquirers, such as Square, and Automated Clearing House or ACH acquirers, such as PayPal and Dwolla. And then there are even more ambitious alternatives to cash that have been proposed, such as Bitcoin, a Web-based cryptocurrency.<\/p>\n

Unlike traditional money, such alternatives do not derive their value from government fiat\u2014i.e.,\u00a0the government has not established their legitimacy or value<\/span><\/span>.<\/span> Each of these alternatives has\u00a0an evolved network within which it is\u00a0uniformly accepted as a means of payment; the more established\u00a0alternatives, of course, have the widest networks.[1]<\/sup><\/a><\/p>\n

We will examine this trend further in the next readings.<\/p>\n\n\t\t\t

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Candela Citations<\/h3>\n\t\t\t\t\t
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