Reading materials B

Money: Toward the Cashless Society
How will computers affect my financial matters?
“The future of money is increasingly digital, likely virtual, and possibly universal,” says one writer.23 Virtual means that something is created, simulated, or carried on by means of a computer or a computer network, and we certainly have come a long way toward becoming a cashless society. Indeed, the percentage of all financial transactions done electronically, both phone-initiated and computer-initiated, was projected to rise to 18.4% in 2013, up from 0.9% in 1993.24 Besides currency, paper checks, and credit and debit cards, the things that serve as “money” include cash-value cards (such as subway fare cards), automatic transfers (such as direct-deposit paychecks), and digital money (“electronic wallet” accounts such as PayPal).

Many readers of this book will probably already have engaged in online buying and selling, purchasing DVDs, books, airline tickets, or computers. But what about groceries? After all, you can’t exactly squeeze the cantaloupes through your keyboard. Even so, online groceries are expected to reach $7.5 billion in U.S. sales by 2012.25 To change decades of shopping habits, e-grocers keep their delivery charges low and delivery times convenient, and they take great pains in filling orders, knowing that a single bad piece of fruit will produce a devastating word-of-mouth backlash.

Only about 46% of U.S. workers have their paychecks electronically deposited into their bank accounts (as opposed to 95% or more in Japan, Norway, and Germany, for example), but this is sure to change as Americans discover that direct deposit is actually safer and faster. Online bill paying is also picking up steam. For more than two decades, it has been possible to pay bills online, such as those from phone and utility companies, with special software and online connections to your bank.

Some banks and other businesses are backing an electronic-payment system that allows internet users to buy goods and services with micropayments, electronic payments of as little as 25 cents in transactions for which it is uneconomical to use a credit card. The success of Apple Computer’s iTunes online music service, which sells songs for 99 cents each, suggests that micro sales are now feasible. All kinds of businesses and organizations, from independent songwriters to comic book writers to the Legal Aid Society of Cleveland, now accept micropayments, using intermediaries such as BitPass and Peppercoin. Thus, you could set up your own small business simply by constructing a website (we show you how later in the book) and accepting micropayments.

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