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Monday, May 15, 2000
A cashless society lies ahead of us
Advanced technology may make for easier shopping
By Tom Raithel
Scripps Howard News Service
"Imagination is more important than knowledge. Knowledge is limited. Imagination circles the world."
Those are the words of Albert Einstein, a profound thinker and a man who understood the value of imagination perhaps better than anyone else of his day.
The 20th century was a time of stupendous change, but all that may pale in comparison to what awaits us in the rest of the 21st century. Here's a look at what the future may hold:
In 100 years, you might as well leave your wallet or purse at home.
You will be able to walk to the grocery and, when you reach a checkout station, place your thumb against a screen.
The screen will read an identity chip embedded under your skin and charge you the cost of the items.
The money will be deducted from your financial account, which will be a simple electronic file somewhere.
That may sound like science fiction, but much of the technology exists now.
Who will need dollar bills and coins in this brave, new financial world? Who will need checks?
Will banks be tomorrow's architectural curiosities? Will even credit cards become financial fossils?
The financial world is changing, experts say, but perhaps more slowly, or to a lesser extent, than outlined above.
Soumen De, an associate professor of finance at the University of Evansville, says the technology for the cashless society is available now.
In Europe, for example, people can buy soft drinks from a vending machine without cash.
They use a cellular phone programmed with their credit information.
By dialing a number listed on the vending machine, a soft drink can be dispensed and the cell phone operator charged.
Technology is also in place to put identity chips in such everyday items as watches, or even under the skin, such as in the thumb.
These can be used to keep track of personal financial transactions, De said.
The cashless society will be more efficient, De said. It will eliminate what economists call "leakage," which is the amount of money that is outside of financial institutions and isn't earning anything.
It will reduce the cost of replacing paper bills that deteriorate and coins that are lost, De said.
Ann Burnworth, director of corporate relations with Old National Bancorp, agrees that banks will play an important role in the coming century.
Banks provide easy access to cash and a reliable system of payments. "You can't cash a $10,000 check over the Internet, or at your local stockbroker's office," she said.
But banks will change. Because of increased competition due to legislative changes, financial institutions will be more competitive, giving better and better deals to customers.
While some institutions become bigger, others will remain relatively small and community-centered, Burnworth said.
As more financial transactions are conducted on the Internet, financial planning, investment advice and other services will become more depersonalized.
That will spur greater demand for a "personal touch" that banks can best provide.
She also agrees that banks are in the best position to provide a variety of services. "After all, banks enjoy consumer trust."
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