“Digital payment systems bring financial inclusion to those who have less, are unbanked, or underbanked.”
I am grateful to @Dr. Diane Hamilton, for the opportunity to talk about Cashless on her nationally syndicated radio show “Take the Lead.”
Diane is a behavioral expert, author, speaker and consultant and her background came shining through with the great questions she asked. Diane asked the most human and probing questions yet about how going digital will impact our lives
Diane graciously provided full transcripts of our discussion which are available on the link below. Rather than produce a time stamp, as I usually do I’m going to highlight a few interesting sound bites that will give you an idea of what’s inside:
What was the point for you, specifically, of why you wanted to write this book?
I get emotional about this because I’ve lived here since 2010. I lived the changes, and I saw how it changed my life going to cashless, going to digital payments. When I would go back to the United States, “There’s Venmo. We’ve got Apple Pay and Google Pay,” I would see what’s going on, and I’d say, “This is a problem.” Digital payment is infrastructure no different than bridges and roads.
Frankly, our digital payment system is a bridge that was built around 1985, maybe the early ‘90s at best. It hasn’t been maintained or changed much since. As that gap between China and the US grew, I said, “People in the United States have to be made aware that we’re missing something here. This is good for society. This is GDP-positive. This helps people who are unbanked.”
The US has an advanced banking system, but the Fed itself has statistics and acknowledges that 23% of the US population is either unbanked or underbanked. To be underbanked essentially means you’re using check cashing or other non-bank expensive services. Even the United States, as sophisticated, and certainly there are banks everywhere, could benefit from these digital payment systems to bring financial inclusion to those in America who have less and are unbanked or underbanked. It’s not just China that has this problem. It is the United States as well.
How is WeChat and Alipay different from something like Venmo?
From a payment’s perspective, they all pay for stuff, and that’s true. They do that. WhatsApp has got nothing on WeChat. That comparison is only shallow. WeChat has every business in China connected to it, things like your utilities, all the stores, lots of retail, banks, and asset managers. You have one app, WeChat, and Alipay, which is run by Alibaba, the equivalent of Amazon in China. Both of these apps, WeChat and Alipay, give you 360-degree lifestyle coverage. Do you want to put money in your bank? You use WeChat and Alipay. Do you want to buy stocks? You use WeChat and Alipay. Do you want to buy flowers? You use WeChat and Alipay. My point is whatever it is you want to do in your digital lifestyle, it is on these apps.
CBDC impact on Alipay and Wechat:
Central bank digital currency is going to go places that WeChat and Alipay never went. For example, many of us who work get direct deposits. In China, if you get a direct deposit into your bank, you don’t get it through WeChat and Alipay. That’s considered a large value transaction that’s not handled by these programs. In a few years, you are going to get central bank digital currency directly deposited into your bank and that will be how you get paid.
How do they feel about the private sector handling the currency when it didn’t use to be that way?
It’s going to be a question that the US is going to have to deal with someday. If you’re reading this and you’re thinking, “This is China. What does this have to do with us?” For that, trust me. If you look and read my book or if you look at China, what you’re seeing is that China lays out a blueprint or a roadmap for our own digital future. Like it or not, they’re ahead of us in the west, in the US, and in Europe for this digital payment stuff. What they’ve done is they’ve gone ahead. If you want to know where the US is going to be at some time in the future, look to China today. That’s why this is relevant.
If you’re reading this and you’re thinking, “This is China. What does this have to do with us?” For that, trust me. If you look and read my book or if you look at China, what you’re seeing is that China lays out a blueprint or a roadmap for our own digital future.
The broadcast is available on all major podcast providers and the sites below: