The New York Times over the weekend carried an interview with PayPal CEO Dan Schulman, in which he made the following observation when asked about India’s efforts to ban cash:
“There are two mega-trends happening right now in the financial services industry. One: You’re seeing the digitization of payments. People are moving away from checks. People are slowly but surely moving away from cash.
“That’s driven by the other big trend, which is the explosion of smartphones. In smartphones, you have all of the power of a bank branch in the palm of your hand. You can do basic transactions at a fraction of the cost and a fraction of the time that it took you before. That can enable so many of these underserved populations to come into the mainstream as well and do things that perhaps you and I take for granted, and it can actually make a real difference in their lives.
“The demonetization in India is one of the most audacious and bold experiments that a government has done. India is one of the last places you would think that would try to get rid of cash, but there's a huge issue that goes on. There's a huge amount of graft and corruption. But if the government can directly send that money to you electronically, right into a digital account or a bank account, that could be incredibly impactful in that country. Whether it fully works or not, it is a harbinger of things to come.”
“There are two mega-trends happening right now in the financial services industry. One: You’re seeing the digitization of payments. People are moving away from checks. People are slowly but surely moving away from cash.
“That’s driven by the other big trend, which is the explosion of smartphones. In smartphones, you have all of the power of a bank branch in the palm of your hand. You can do basic transactions at a fraction of the cost and a fraction of the time that it took you before. That can enable so many of these underserved populations to come into the mainstream as well and do things that perhaps you and I take for granted, and it can actually make a real difference in their lives.
“The demonetization in India is one of the most audacious and bold experiments that a government has done. India is one of the last places you would think that would try to get rid of cash, but there's a huge issue that goes on. There's a huge amount of graft and corruption. But if the government can directly send that money to you electronically, right into a digital account or a bank account, that could be incredibly impactful in that country. Whether it fully works or not, it is a harbinger of things to come.”
- KC's View:
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He’s with PayPal, so he has a dog in this hunt.
But I think the point is interesting.
