The New Color of Money

Steve Mayes With time, our money and monetary system has evolved with the most dramatic change about to take place. The future of money will never look the same again.

Of course, no one uses gold any more as payment for goods and services. Printed bills and coins have been on the decline for some time now. Checks (the most popular modern alternative to cash) have risen in use to 24% of all retail sales. For the first time in 2001 checks took a down-turn in number issued. The primary reason is the introduction of the check card by banks hoping to decrease the use of checks to save money. As much as 20% of the checks still being written are now electronically deposited into the merchant’s bank account just like a credit card transaction. This saves business owners valuable time and hassle especially when the checks are guaranteed, and banks save time in processing.

Credit cards / debit cards / check cards will be undergoing one of the most drastic changes in the evolution of money since their introduction in the 50’s. The new credit/debit cards being introduced will have a microchip embedded in the card instead of the old style magnetic strip. You may have heard them called smart cards. They have been used for years in Europe and the UK . American Express Blue has them. Phone cards and pay phones in the western part of the U.S. now use them too. Magnetic strip technology is over 25 years old. Think about it. Cassette tapes (magnetic strip) were outdated by cd’s (digital). VHS (magnetic strip) outdated by dvd’s (digital) and now our credit cards are going digital.

The difference is that the information is stored on the card (Stored Value) instead of somewhere else (Remote Access). The benefits to credit card companies in fraud prevention savings alone is worth billions of dollars per year. In the near future each computer will be fitted with a smart card reader. E-commerce will then require the card to be present at purchase instead of just the numbers. Personal identification numbers (PIN) will be required to use the smart card, which will also have the capability to store your health info, public record info, etc. With about 264k of memory it is equal to one of the early computers.

Merchants will be required to have credit card terminals that have smart card readers on them. Companies are already marketing terminals that read both the magnetic strip and the micro-chip. My suggestion is to get equipment that is smart card ready now before the prices go up with the demand. The new color of money is digital. If you are not on the superhighway then you are out of business.

About the Author

Steve Mayes is Vice President of Sales & Marketing for USA Card Services in Dallas, TX. He has extensive experience consulting small businesses and has been interview by Success Magazine for outstanding achievements in his field. He can be reached at steve@usacardservices.com