CLOUDDimensions: Monetary Instruments Though the Lens of WHO, WHAT, WHEN & WHERE (Part 2 – Credit & Debit Cards)

Since the first installment of monetary instruments through the lens of CLOUD Dimensions, I’ve had the pleasure of attending both SWIFT’s Operations Forum of the Americas and am in the midst of the South by Southwest Interactive. Earlier today, I attended two panels at SXSWi. One was on the topic of consumer lending, and the second was on the topic of bank innovation.  Each of these events have added to my thinking on this topic, as well as reinforced my belief that we need to dig below our conceptions of money and banks to truly understand where the advance of technology is taking both us and our future economy.

Throughout the second panel, ably led by Brett King of Banks 2.0 fame, I found myself repetitively tweeting the same meme that is developing here on monetary instruments. “Money has always been mobile.” We once moved it around by stagecoach. With the advance of technology, we’ve added checks, debit and credit cards to the mix. And, as was pointed out during the bank innovation panel at SXSWi, we are now adding mobile devices to the mix, too.

Whether by stage coach, card or mobile, however, each of these mechanisms is simply a distribution mechanism for the money itself. Mobile hasn’t reinvented money, it has just become the stagecoach of the 21st century. So, to understand the future of banks and monetary instruments, we must continue to think about the ways in which we use money as a medium of exchange, unit of account, and a store of value. Because it is in its role as a store of value, that the magic of money can be advanced in the 21st century. Money began as commodity money. Early coins, like shekels, had value based on the weight of a commodity. In the case of shekels, that commodity was barley (citation to wikipedia). Of course, money is now digitally recorded, so we must ask ourselves, how do we ‘weigh’ the value of money in the 21st century?

I began this journey over the meaning of money at Sibos in Amsterdam, and the conversation continues at Chris Skinner’s blog at the Financial Services Club in his post on “Money is meaningless.” CLOUD has added some additional comments on this topic at the FSC blog. The other comments are also worth your attention.

To be continued….