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The future of money: How can brands prepare for a cashless society?

Transactions in society are transforming. We live in exciting times and the very ideas of value, exchange and currency are being disrupted by systems that trade in trust, social currency and data.

Recent research by Starcom reveals a third of Brits believe we will be cashless by 2031. The speed and scale of disruption the financial sector is facing mirrors many of the challenges the media, publishing, music and film industries continue to encounter. These traditional business models have been challenged and transformed almost overnight. Across the finance sector we believe there are four key areas of disruption on the way: how consumers choose to pay and earn, the proliferation of competitive intermediaries and the new responsibilities businesses must accept and adopt in this era of electronic/digital payment.

These disruptions are happening across the globe, but the UK is a particularly interesting marketplace for all observers. The UK has an established banking system, but perhaps the fact that we are smaller means it has been less burdensome to update our payment systems (eg introduction to contactless terminals). This has led to less reservation and reluctance to adopting new innovations.

Today’s booming entrepreneurial spirit – born from a mix of technology, a tough economic climate and the fact that we live much longer – means we are on the brink of unlocking potential value in the world around us. With a rise of 38 per cent between 2011 to 2015, the flourishing base of startups shows no sign of abating, despite the recovering economy. Brands and media businesses need to embrace the growth of the startup community and start thinking of new ways to engage with consumers as contactless payments increase.

Assets that were formerly owned and static can now be used as part of the dynamic sharing economy. The scale in which we embraced the ability ‘to Airbnb our spare rooms’ and ‘Uber our cars’ has meant that the chancellor’s budget this year had to look at ways of taxing these earnings.

Actions from customers can also unlock credit which in turn builds engagement with advertisers. It could be an extended happy hour by giving the brand a #shoutout. Lyft, a competitor to Uber, rewards customers with additional credit for being a polite, decent five-star rated customer.

We are all traders now. We do what we can to earn what we want. And, this exchange doesn’t have to feature money. All businesses must find ways to tap into this pioneering new world of trading.

The world in which we live is based primarily on a desire for services and experiences rather than just products. This could mean that you flip your product on its head. Are you selling coffee or selling a creative space to work? Coffee shop Ziferblat charges individuals by the hour rather than the coffee they drink. Advertisers must therefore consider how they can integrate payments into consumer experiences.

We must also acknowledge that we still live in a world with issues such as climate change, famine, war and extreme poverty. Businesses have options. Either compete in tough, saturated markets, or support those who have nothing to grow new markets for your products, and in the process make the world a better place. Coca-Cola’s initiative to help five million female entrepreneurs by 2020 answers precisely this brief.

The implications, both now and in the future, are whether brands decide to use their customers as data to be traded or alternatively provide valuable data to their customers to allow them to trade and thereby create new revenue streams. In a world of increasing digital payment, brands, and indeed all media businesses, must take on these responsibilities in order to excel.

Heather Dansie is associate director of research at Starcom

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