I remember the very first ATM machine. It was a Docutel at the Lincoln Savings Bank in Brighton Beach, Brooklyn. “This is the beginning of the cashless society,” they told me at the bank. A pretty bold statement for the time since there were no networks then and each ATM was totally independent. Check printing grew annually for another 30 years before debit cards with the Visa® and MasterCard® logos took hold and made payments ubiquitous.
Fast forward to 2009 and the birth of Square, the brainchild of Twitter founder Jack Dorsey. Their first product was the little white square that plugged into an iPhone and let almost anybody accept credit cards. They’re now processing about $6 billion annually in transactions – and that grew threefold last year.
The next evolution is Square Register, an application that replaces the cumbersome hardware cash registers used in stores with specially-outfitted iPads. Now, you can walk into Café Grumpy in Chelsea, and their “register” knows it’s you, and automatically charges the transaction. (Ok, you preload your credit or debit card info onto your phone first. But then it never leaves your pocket.) Order your special latte, and you feel your phone vibrate in your pocket: transaction done! How’s that for cool?
Fortune Magazine is touting the death of cash and the NY Times reported that Starbucks just invested $25 million in Square. This will really help Square scale; soon you’ll be able to walk into any Starbucks, and your picture and ordering preferences will be on the Barista’s screen before you can say “hi.”
But challenges to a cashless society remain: we’ll have to get more payment systems standardized. Bell hops and car valets will need to be on the system so we can wiggle our phones and tip them.
I suspect we might even eliminate our deficit when cash goes away: all those “cash” transactions and off-the-books payments go bye-bye. Of course, I do worry that the government will just spend the money rather than pay off our National Debt. But, that would be a good problem to have.
What do you think?