This blog is the second in the series based on the book The Industries of the Future by Alec Ross. This blog shares thoughts on coded money, markets and cyber security.
The journey of money that moved from coins-cash-cheques-plastic cards is on the cusp of a change in the form of digital money or coded money. PayPal, Google Wallet, Bitcoin, WebMoney, ApplePay, Paytm are some examples of digital or coded money that facilitates transactions over the internet. Coded money helps to make the commerce more fluid. It allows the consumers to complete transactions without being tied to their wallets and merchants from being tied to a traditional cash register and credit card machine.
What is interesting is that this innovation is neither restricted to advanced countries nor to the rich. Unified Payment Interface (UPI) introduced in India would be available to everyone who has a smart phone and a bank account. UPI would help India move towards a cashless economy by carrying on transactions through digital money. It is simple to operate; a unique UPI ID would be created by using your phone number that is linked to your bank account. For an example, if your mobile number is 3333333333 and you have a bank account with the ICICI Bank, your UPI id may be 3333333333@ICICI. To send money, add recipient id, for e.g. 6666666666@YES (the recipient mobile number 6666666666 with the recipient bank account) in the app and ‘send money’ through UPI. The money gets transferred instantly to the bank account of the recipient in a secure system. As the then RBI Governor Dr. Raghuram Rajan said during the UPI soft-launch, the system is designed to turn your smartphone into a payment bank that is available 24/7.
Coded markets in the form of Airbnb and Uber are changing the way hotels and taxi services work by creating value out of latent goods. Why should your spare room not earn rent or car remain parked for the day when you are at the office? The networked world has made it possible to create markets from such underutilised valuable goods. This has led to win-win for both; buyers and sellers. Travis Kalanick, founder and CEO of Uber, hopes that people would stop owning cars in the future.
Will such markets be inclusive? Coded markets would reach the world’s most isolated communities and link them to the global economy. The application of code to commerce will provide new opportunities for the little guy in any part of the world to receive, hold, spend, or transfer money. I know of a bespoke designer who makes leather covers for mobile phones for customers across the world. The proverbial dry fruit merchant from Kabul will not have to stay away from home to sell.
Would it be safe to deal with large amounts of money on the internet? The technology in the era of ‘Internet of Things’, with smart cities, smart homes, smart cars and globally networked computers is also available to hackers and terrorists. But then, did we ask similar questions when plastic money and ATMs came?
Cyber security is an emerging area. It would thrive on ‘fear and ignorance’. If a student were to ask me about the most lucrative career in the future, without blinking an eyelid, my answer would be cyber security.