STOCK MARKET WATCH -- Thursday, 1 March 2012

[xchrom]

33. Me, My Money, and My Devices

http://www.technologyreview.com/business/39820/?p1=featured



Money is a common language we all agree to use to convey the of value of things. Since the Chinese starting using cowrie shells as an early form of currency more than 3,000 years ago, societies everywhere have been looking for forms of money that are portable, divisible, durable, and reasonably stable in supply. Over time, money has become less physical and more symbolic: tangible commodities such as gold have given way to tokenized paper and now to ephemeral digits in a computer.

The proliferation of digital communication technologies means we can now marshal our money with remarkable speed and ease—checking balances from a mobile phone, making a payment pretty much anywhere merely by showing a thin slab of plastic, buying and selling stock over the Internet. Yet beyond the transactional speed and convenience, our concept of money and the ways we handle it have not been radically transformed.

Personal Internet banking is convenient, for example, but the services you find online are the same ones that were available when you used to walk over to the branch. You still have to choose among prepackaged accounts. If you move money from your checking to your savings account, the bank remains oblivious to whether you are doing so to put aside money for your kids' schooling or for the family holiday. You can buy a certificate of deposit, but you can't choose the maturity date: why can't you set it to come due the same day you plan to leave on an expensive trip? The banks' failure of imagination is exposing them to disruptive entry by players specializing in customer management and user interface design. Examples include Mint.com, which consolidates all of a user's financial accounts and information in one place, and Simple, an alternative banking service that promises fewer fees and better customer service.

Mobile payments, meanwhile, still seem to many an unnecessary complication. But the appeal of being in constant contact with your money—and information about your money—will prove irresistible. Back in the days when electronic devices were expensive, someone had the clever idea of giving dumb plastic cards to all of us and the more expensive card readers only to merchants. Now that we have a virtual card and card reader right in our pocket in the form of a smart phone, who will be content to carry a credit card we cannot ourselves read?