Step into KFC’s KPro restaurant in the eastern Chinese city of Hangzhou and you will find customers smiling for their supper.
The “smile to pay” system means a camera at the counter scans a customer’s face, verifies their identity from records on the Alipay app, and takes payment.
Smartphones allow fingerprints, iris scans and voice recognition – or even just our physical presence in a store – to be sufficient to make a payment. Sending a message on a mobile to take a bus ride or transfer money home is common in Africa.
Thanks to mobile payments, it is entirely possible that we will see a major country such as China become a predominantly cashless society in five years’ time, if not sooner.” Bryan Zhang, co-founder, Cambridge Centre for Alternative Finance in the UK
The breakneck speed of change in this sector makes it “futile” to predict exactly what will happen in the next decade or two, adds Mr Zhang.
But one thing is for sure: millions of people are increasingly turning to their smartphones not only to pay, but to manage their money – by applying for loans, finding the best insurance deal, or donating to charity.
Non-cash payments in China rose by 63% in 2014-15. In the UK, non-cash payments have now overtaken the use of notes and coins. So there are challenges for cash all round the world.
Meanwhile, technology is reinventing the very building blocks of our finances. As long ago as the 16th Century BC, goods were exchanged for a form of currency – cowrie shells.
Later, in the 7th Century BC, coins were first minted in Lydia, in modern-day Turkey, from electrum – a natural alloy of gold and silver found in riverbeds.
Much later, paper money was introduced in China. Known as “flying cash” owing to its convenience and lightness, it was backed by the central authority. According to Ben Alsop, curator of the Citi Money Gallery at the British Museum in London, that introduced a vital concept – trust.
Trust of the authorities, and trust that this piece of paper was actually worth something. So, for years, currencies have traditionally been issued by governments via central banks.
Now cryptocurrencies can be created and stored electronically on a completely decentralised system. More than 1,000 of them exist globally, the best-known of which is Bitcoin.
All of which raises issues of control and influence. Who controls currency – governments or networks of computers? Who controls our payments – technology companies, payment card providers, or banks?
Arguably most importantly of all, who controls all the data about our financial transactions – you or them?