New, disruptive technology is about to transform the global economy.
Digital money – which includes everything from Apple Pay to Bitcoin and contactless cards – is not just a more convenient way to pay. According to Professor Mark Dodgson, an innovation expert from the University of Queensland Business School, it will have much wider implications.
Here are seven ways he believes digital money will change the world:
- More trade – as digital money cuts the cost of transactions, it will make trade more competitive.
- Easier accounting – financial reporting will be more straightforward as transactions will all be recorded.
- Less queueing – just look at what’s happened in London since the introduction of the Oyster Card.
- Increased tax revenue – less ‘cash in hand’ will make it harder to disguise income!
- More income for charities – digital payments will make it easier to donate money.
- A boost for the world’s poor – in developing countries, digital money will allow billions of people without a bank account to access the financial system for the first time.
- New opportunities and challenges for business – Professor Dodgson says there will be a wealth of new apps and services: “Digital money will provide opportunities for new business models and allow companies to engage with customers in new ways, as well as reducing transaction costs. It will also generate massive amounts of data which, using the right analytics, will provide new insights into consumer behavior which will inform the development of innovative products and services.”
However companies big and small could face competition from newcomers to the market, Professor Dodgson warns: “Ultimately, those that cannot connect digitally will be left behind and eventually driven out of business.”