The Digital Economy: How the cashless society will impact finance, retail and privacy Learning objective: Discover how changes in banking can change human nature The introduction of electronic banking, online transactions and mobile banking has paved way for a new era, where the use and demand for physical cash is gradually declining. This recent evolution of technology in financial institutions poses interesting questions for economists, financial institutions, business analysts and the government regarding the status, logistics, and availability of instruments to guarantee economic growth and stability, efficiency and effectiveness of the cashless policy. Recently, India has launched a nationwide program involving the allocation of a Unique Identification Number (UID) to every single one of its 1.2 billion residents. Each of the numbers will be tied to the biometric data of the recipient using three different forms of information – fingerprints, iris scans, and pictures of the face. All ten digits of the hand will be recorded, and both eyes will be scanned. At the end of this seminar, participants will be able to: a. Assess what advantages we gain and what rights we lose in a cashless environment b. Explore how a cashless society depowers the individual and empowers government and retail c. Investigate how a cashless society would make the world a safer place

1. THE DIGITAL
ECONOMY: HOW THE
CASHLESS SOCIETY
WILL IMPACT FINANCE,
RETAIL AND PRIVACY
Kendall Williams, Moderator
Gail Ball, Presenter
Reginald Gillins, Panelist
Colleen Taylor, Panelist

2. Disclaimer
• The views expressed in this presentation are
my own and do not represent the official
views of the Richmond Fed or Federal
Reserve System. Also, references to
products, processes or services are for
informational purposes only, do not
constitute endorsement, recommendation or
favoring by the Richmond Fed or the Federal
Reserve.

3. Why Is The Digitalization of Everything
Important…and How is it going to show up for
us?
“The next big thing will only take off if it helps
to further reduce clutter in our lives, if it
allows us to throw something away or stop
doing some hated chore.”
Leonard Bershidsky Bloomberg blogger wrote while attending this
year’s CES in Las Vegas

4. How close are we
to being“CASHLESS”?
The average American uses cash for _____ % of
their purchase and bill transactions per month…but
the dollar value is only 14% of these payments. [FRB
2012 Diary of Consumer Payment Choice]
_______% people have $99 or less in their physical
‘wallet’ on any given day [U.S. Consumers’ Holdings and Use of $100 Bills,
Federal Reserve Bank of Boston, November 25, 2014]
While cash use is estimated to be declining at 2.5%
per year, use of ‘cash equivalent’ debit and prepaid
cards grew from 12% of all non-cash payments in
2000 to ___% in 2012 [2000 and 2012 Federal Reserve Non-Cash Payments
Study]

5. Will the Digital Economy Make Us Wealthier?
 The cumulative decline in median real family income
from 2001-2013 was ____% [FRB St. Louis Center for Household Financial Stability
using data from the FRB Survey of Consumer Finances 2013]
 Demonstrating that the ubiquity of mobile phones is
changing the way consumers access financial services,
____% have used mobile banking (balance checking,
account transfers, investments, payments) in the past 12
months [Survey of Consumer and Mobile Services 2014, Board of Governors Federal Reserve System]
 Which of these mobile budgeting mobile apps has not
yet been acquired by a bank? MOVEN, LEVEL,
SIMPLE

6. How Fast is the Retail Experience Changing
to be Digital?
 What could you buy with a Speedpass key fob beginning
in 1997? [sourced from Wikipedia, 1/15/15]
 What year did the Google Wallet debut, allowing Android
users to pay with their mobile phones at select retailers
in the US? [sourced from Wikipedia, 1/15/15]
 With 5 year compound annual growth projected, volume
of mobile payments will rise to $ 818BB or just under
___% of total US payment volume? [www.businessinsider.com 1/9/15 ]

7. As we go Digital, what happens to our sense
of privacy?
 How many consumer records were affected by data
breaches in 2014? [www.idtheftcenter.org, 1/15/15]
 How much did the computers cost the Luxembourg
students who reverse engineered a Bitcoin
transaction to identify the ‘anonymous’ party who
bought Bitcoin? [Payments and Banking Chronicle, FRB of Cleveland, 12/2/14]
 What tokenization scheme for credit card account
numbers must be supported by October 2015 to
avoid the liability for payment fraud? [www.paymentsleader.com,
1/15/15]