THE DIGITAL

ECONOMY: HOW THE

CASHLESS SOCIETY

WILL IMPACT FINANCE,

RETAIL AND PRIVACY

Kendall Williams, Moderator

Gail Ball, Presenter

Reginald Gillins, Panelist

Colleen Taylor, Panelist

Disclaimer

• The views expressed in this presentation are

my own and do not represent the official

views of the Richmond Fed or Federal

Reserve System. Also, references to

products, processes or services are for

informational purposes only, do not

constitute endorsement, recommendation or

favoring by the Richmond Fed or the Federal

Reserve.

Why Is The Digitalization of Everything

Important…and How is it going to show up for

us?

“The next big thing will only take off if it helps

to further reduce clutter in our lives, if it

allows us to throw something away or stop

doing some hated chore.”

Leonard Bershidsky Bloomberg blogger wrote while attending this

year’s CES in Las Vegas

How close are we

to being“CASHLESS”?

The average American uses cash for _____ % of their purchase and bill transactions per month…but the dollar value is only 14% of these payments. [FRB 2012 Diary of Consumer Payment Choice]

_______% people have $99 or less in their physical ‘wallet’ on any given day [U.S. Consumers’ Holdings and Use of $100 Bills, Federal Reserve Bank of Boston, November 25, 2014]

While cash use is estimated to be declining at 2.5% per year, use of ‘cash equivalent’ debit and prepaid cards grew from 12% of all non-cash payments in 2000 to ___% in 2012 [2000 and 2012 Federal Reserve Non-Cash Payments Study]

Will the Digital Economy Make Us Wealthier?

The cumulative decline in median real family income from 2001-2013 was ____% [FRB St. Louis Center for Household Financial Stability

using data from the FRB Survey of Consumer Finances 2013]

Demonstrating that the ubiquity of mobile phones is changing the way consumers access financial services, ____% have used mobile banking (balance checking, account transfers, investments, payments) in the past 12 months [Survey of Consumer and Mobile Services 2014, Board of Governors Federal Reserve System]

Which of these mobile budgeting mobile apps has not yet been acquired by a bank? MOVEN, LEVEL, SIMPLE

How Fast is the Retail Experience Changing

to be Digital? What could you buy with a Speedpass key fob beginning

in 1997? [sourced from Wikipedia, 1/15/15]

What year did the Google Wallet debut, allowing Android

users to pay with their mobile phones at select retailers

in the US? [sourced from Wikipedia, 1/15/15]

With 5 year compound annual growth projected, volume

of mobile payments will rise to $ 818BB or just under

___% of total US payment volume? [www.businessinsider.com 1/9/15 ]

As we go Digital, what happens to our sense

of privacy?

How many consumer records were affected by data

breaches in 2014? [www.idtheftcenter.org, 1/15/15]

How much did the computers cost the Luxembourg

students who reverse engineered a Bitcoin

transaction to identify the ‘anonymous’ party who

bought Bitcoin? [Payments and Banking Chronicle, FRB of Cleveland, 12/2/14]

What tokenization scheme for credit card account

numbers must be supported by October 2015 to

avoid the liability for payment fraud? [www.paymentsleader.com,

1/15/15]