Paying With Your Phone

We already have a perfectly fine way to make non-cash payments.

By Farhad Manjoo

Illustration by Robert Neubecker. Click image to expand.Paying for stuff is considered an important part of the economy, one of those activities that civilization has been refining for thousands of years. Yet it’s still a big hassle. The major problem, of course, is cash. Paper money is a pain to acquire and carry—you can only find it at specialized locations, many of which charge you outrageous fees. It isn’t safe; if you lose cash or it gets stolen, that’s that. Cash leaves no record, which is good for thieves and tax cheats, but inconvenient for the rest of us. (Wouldn’t you love to know how you squandered $100 Saturday night?) And it’s pretty gross, too. That $20 you’re carrying was in some dude’s pants.

It makes sense, then, that few Americans want to use cash anymore. According to a 2008 Federal Reserve survey, the "median American" (that’s you!) carries only about $30 in paper money at any one time. Mr. and Ms. Median visit an ATM just three times a month, and since 1995, the dollar value of cash transactions in the economy has plummeted. (So has the value of payments made by check, another terrible system). Yet despite our clear distaste for paper money, many retailers accept nothing else. And then there are the parking meters, vending machines, buses, newspaper stands and other outlets that want exact change.

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