FINTECH FOCUS: PAYMENT CHOICE
A new warrior in the war on cash Can the UK Cash Supply Alliance end hostilities for good? Ron Delnevo meets its Co-founder and Chair, Nigel Constable The war on cash started in 1949. Frank McNamara, a New York businessman, had dinner with his wife and some clients at Majors Cabin Grill in his home town. When the time came to settle the bill, Frank discovered he had left his wallet in another jacket. His wife had cash, so the bill was paid – but the experience got Frank thinking. Perhaps what Frank should have thought was that he needed to take his wife out more because, in those far off days, no woman would ever forget to take a handbag, even if her husband was dumb enough to forget his wallet. Anyway, the next year Frank returned to the same restaurant and this time paid with a small cardboard charge card. Diners Club was born that evening, with the card industry later describing Frank’s meal as the First Supper.
Credit cards were the next ‘big idea’, with Bank of America launching the BankAmericard in the US in 1958 and Barclays launching the Barclaycard in the UK around a decade later. A similar pattern emerged in relation to debit cards. The first US debit card appeared in 1978. However, in the UK they were delayed by nearly 10 years. Of course, it took longer than that for the card industry to pluck up the courage to openly declare a war on cash. Famously, the industry leader who finally swallowed enough brave pills was Ajay Banga, the now former CEO of Mastercard. Banga announced his war on cash in Mumbai in October 2010, the day after the Indian government started a campaign to give identification numbers to all
1.2 billion citizens. He saw a huge opportunity to work with the Indian government, with payments to the poor being processed via the Mastercard network. He was no doubt annoyed to find that, in 2010, 85 per cent of the planet’s payments were still being made using cash. The fact that this percentage had been the same or higher for more than 2,000 years cut no ice with the plastic tycoon. It just strengthened his resolve. So how successful has this phoney war on cash been? Mastercard and Visa, the two giant US payment networks, have both been very successful in issuing cards. Today, there are around five billion of them, carrying one or other of the two brands, in use. China UnionPay claims to have issued another seven billion cards. In
A battle for choice: The UK Cash Supply Alliance is mustering forces
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TheFintechMagazine | Issue 23
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