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Digital Adolescence

August 15th 2014

The invention of standard money for payments – as opposed to simple bartering – is accredited to the legendary Lydian king Croesus in around 550BC.  He apparently created the first gold coins of accredited value, became the first international bank, made a large fortune (what’s new?) and bequeathed us being “minted” or “as rich as Croesus”.  The fact that the Chinese also invented standard coinage at about the same time (and certainly introduced paper money some time later) is largely forgotten.

Fast forward to this century and mobile retail accounted for 32% of online UK sales between November 2013 and January 2014.  Within 100 days of its release in April, one million people registered for the Paym mobile wallet and it has been responsible for over £6.5 million of transactions.

And the "millennium generation" digital natives (being 15-25 year olds) are the demographic target.  A recent Ofcom survey suggested that those aged 14 and 15 show the most understanding of digital technology. The figures found that nine in ten 16 to 24-year-olds own a smartphone – perfect for those mobile payments.

Yet, a recent report by Intercede found that 53% of consumers would not use mobile banking services because of concerns about device security.  The digital identity firm found 75% of those surveyed were concerned about data loss, and were most concerned that losing their phone would lead to identity theft.

But, most strikingly, the Intercede found that 18-24 year-olds are the least trusting of mobile banking services, with 60% of this age group refusing to make mobile payments, and 52% claiming they would never use Paypal.

What’s going wrong?  It’s all due to the painful process of growing up and experiencing just what the realities are.  The fact is, despite all the assurances, any form of payment is just not that secure.  It could be tech weaknesses – such as Heartbleed virus– or systematic/people issues, such as eBay’s password hack.  And it’s a pain to change passwords or if you lose your phone.  When you’re very young these things generally don’t affect you but once you reach a fulsome fifteen such things matter – and a healthy cynicism steps in.

Electronic payments may be very young compared to the three millennia that money’s been around, but commerce – and hence financial dishonesty – is twice as old.

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