What's the future of money?

21 July 2015

Interview with

Peter Cowley, tech investor

This month, technology giant Apple have launched an all new 'digital wallet' - called MoneyApple Pay - where you can now pay for your groceries using your iPhone! But Apple isn't the only tech firm changing how we manage our money... From TransferWise to BitCoin, we're having moving to a cashless and increasingly globalised world of banking. What does this mean though for us end-users? Technology entrepreneur Peter Cowley spoke to Graihagh Jackson about the value of virtual money...

Peter - Apple Pay is not the only system on the market. Google have also had something for about 3 years. Many of the listeners will have credit cards and debit cards. Some of which, the more modern ones have got these 4 ARCs on them which is a distance spending. So, you can just wave the card past the reader and pay. Apple have just built it into the phone, in the same way that Google have done. But Apple have added to that the fact that you also need simultaneously to have your finger, thumb or whatever on the reader, on the more modern phones so they're acting as another level of security.

Graihagh - And that's why it's better than current methods in that you have to type in your chip and pin or actually, I could give you my card or you might pinch my card and then swipe and do that.

Peter - Absolutely. Yes, so it's much more secure. Not just that. There's also a tech element behind this as well to do with the way that the Apple phone talks to the reader.

Graihagh - How does it talk to the reader?

Peter - It talks to the reader by combining the card, the phone, and your fingerprint together and give us a one-off code that goes to the reader that even if that's intercepted, that still will not be reusable whereas a normal phone, for a normal card, if you swipe it waving the card over, all it's doing is passing and crosses the card number. So, it's very much more secure.

Graihagh - I see and you mentioned Android had already launched or Google already launched their similar technique but why hasn't it launched? It's not something I've really heard of before.

Peter - Yeah. That's because it's not got across the UK. That's the big difference. So, it's probably bigger in the States. The reason that you haven't heard about it is purely because it hasn't got here ye t.

Graihagh - Possibly also because I'm an avid Apple user as well. You talked a little bit about the security and payment angle here and you've got your fingerprint ID. But surely, there's lots of other ways that we could be authorising payments.

Peter - Yes, there are all kinds of other different ways. We're talking about facial recognition, talking about voice recognition even. The French system for instance use a - they send you a text. There are other biometric processes that could be used. Also, retina scanning might be possible with a mobile phone.

Graihagh - This is all sounding very futuristic. I have heard of something called 'smile to pay' though. This sounds very intriguing. Does that mean I just smile and I just instantaneously pay for my sandwich at Pret, I don't know?

Peter - And if you don't smile, you don't get your sandwich. Is that what you mean?

Graihagh - Precisely.

Peter - No, I suspect that's facial recognition and it just happens with a smile, maybe they're recognising that. But the cause of problem there is if you lend your phone to Kat. Does a Kat then -  her smile will allow her to pay for the sandwich or not?

Graihagh - Can I trust you, Kat?

Kat - Absolutely not.

Graihagh - What's the future here? Can I expect a world where I can just carry on my phone, I don't need any cash? Is that the future of money?

Peter - Possibly, but I would suspect it would be our grandchildren rather than your children who will get to the point where there's no cash. There's a whole stack of upsides and downsides a move away from cash. One of the problems with cash of course, it can be stolen. So, that crime would be removed if we didn't have any cash, but instead, there'd be a whole stack of cybercrime in there. It also costs a huge amount of money to print it tomove it, to store it etc. If there was no cash then of course, we've all got to - a. we've got to have a mobile  device and something like 5 percent of all Americans don't even have a bank account. We need to be able to trust the systems. We've got to have something that is not going to fail. What happens if the battery goes flat? There's a problem on the tube at the moment. If you go in with your mobile phone and the battery goes flat, you can't get off the tube apparently.

Graihagh - Oh dear! Without paying a hefty fine, I imagine.

Peter - Exactly. As if you were there on the tube all day.

Graihagh - But you wouldn't have the cash to pay.

Peter - Exactly, so you're locked up.

Graihagh - Problem solved.

Peter - Exactly.

Graihagh - Okay, so that's in terms of cashless, but what about a more globalised currency? Is there somewhere that... and then there's bitcoin.

Peter - Bitcoin, exactly. Bitcoin is a very complex, very, very techy application, something called blockchain technology and it is being used. It's being use incorrectly as well. It's not just being used, but there are for instance about 6 to 7 outlets including coffee shops here in Cambridge where you can pay with Bitcoin. The Greeks were starting to use Bitcoin because currency sort of disappeared for a couple of weeks recently. So, yeah Bitcoin will be used more and more, but whether it will ever become a global currency, I have no clue.

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