Cashless is King
It’s funny how quickly cash is going away. It’s been heading that direction for a while, but in the last couple years the introduction of Square, Stripe, ApplePay, and Bitcoin have hastened our transition toward a cashless future.
Sweden, in fact, is currently on track to become the first cashless country – only 40% of their currency is now in circulation, and the percentage is declining quickly. According to Credit Suisse, anybody who pays cash in Sweden today is viewed with suspicion (interestingly, Sweden was the first European country to issue paper money back in 1661, so they’ve always been financial innovators!).
In the US, part of what kept cash alive for so long was the minimum that credit card companies charged merchants. No merchant wanted to accept a credit card for a $3 purchase and lose their entire profit margin in fees to the credit card company. But modern payment companies like Square have completely disrupted the old credit card fee structure, and now even street vendors and food trucks accept electronic payments (which, by the way, has a huge public health benefit, given that paper money is typically covered with germs and bacteria).
Tivix operates almost completely on electronic transactions today. Most of our clients pay us via bank wires, our accounts payable runs via Bill.com, and ADP pays our employees via direct deposit, and pays our payroll taxes directly to the various agencies, all electronically. No paper, no cash, no fuss, no muss.
And increasingly at Tivix we are incorporating electronic payments into the digital platforms we build for our clients. The Best Egg platform which we built is a great example, with over $1 billion in loans electronically originated.
We’ve also done some work on Bitcoin platforms. Say what you will about Bitcoin, but the fact is that top venture capitalists are pumping money into companies such as 21, so they clearly see a bright future in it. Last week I bought an airline ticket online and the European airline gave me the option to pay in Bitcoin. I suspect we’ll see more of that.
It’s an interesting time for the entire financial services sector, and we’re enjoying being at the heart of a digital transformation.
Personally, I’m looking forward to never having to go look for a stupid ATM on a dark rainy night ever again.