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If M-PESA paid interest on the balance, or if it charged hefty cash-in / cash-out fees, people would be motivated to keep their money digital within M-PESA.

"...belt-tightening baking customers" - oxymoron or typo:)

According to this NYT article, fraud caused by "Stolen Consumer Data Is a Smaller Problem Than It Seems" (http://www.nytimes.com/2015/08/02/business/stolen-consumer-data-is-a-smaller-problem-than-it-seems.html). It also confirms what I've long suspected, namely, "...consumer fears can be stoked by the incentives of the people providing the data. Many of the statistics on identity fraud and online attacks come from security firms that want more people to buy their services. It’s not so different from the soap company that advertises how many different types of bacteria are on a subway pole without mentioning how unlikely it is that any of those bacteria would make you sick."

Your comment about ambiguity in remittance data on another post reminded me of the time when it was exactly this problem that forced me to pay my monthly rent by cheques because my bank in UK didn't support a long enough field for entering the full payment reference. Who knows, it never might. So, let alone refusing to relinquish their choice of which mode mode of electronic payment they'd like to use, payors will want to have a say on even whether they want to use an electronic payment mode at all. Things may change in future but the said UK bank's field length has still not increased, seven years afterwards and it never might.

Re. data breach and identity theft, this NYT article says that "Stolen Consumer Data Is a Smaller Problem Than It Seems" (http://www.nytimes.com/2015/08/02/business/stolen-consumer-data-is-a-smaller-problem-than-it-seems.html). It also confirms what I've long suspected, namely, "Moreover, consumer fears can be stoked by the incentives of the people providing the data. Many of the statistics on identity fraud and online attacks come from security firms that want more people to buy their services. It’s not so different from the soap company that advertises how many different types of bacteria are on a subway pole without mentioning how unlikely it is that any of those bacteria would make you sick."

@DanG: I agree that that's the assumption but I'm not sure if I agree with the assumption. Even when people are comfortable with digital money and there are more compelling use cases for keeping their cash in digital format, there's the question of trust: If I receive more money than I need to spend, I'd rather cash out when I receive the money and then reload it when I next need to spend it. If I don't receive more money than I need to spend, the whole point is moot: Digital or cash, anyway the amount of money in circulation is not so high!

The same BBC article also said, "And it’s worth remembering that M-Pesa is a system for moving cash around, not a system to eliminate it. Users still hand cash to the M-Pesa vendors to top-up their accounts, and retrieve cash from them when money is sent to them." So, even the success of M-PESA does not imply less cash in future.

@PattyL: I'd smoked the same pipe in From Multichannel To Omnichannel And Beyond! Good to know that it's not a pipedream! However, delivering a seamless journey across multiple journeys requires clickstream capture systems and they do seem to be priced outside the reach of all but the top tier banks. 

Oh, you haven't met me yet:) Jokes aside, I totally agree with you. The confusion is exacerbated in cross-border payments involving correspondent banks. After having been exposed to the payments industry for over a decade, I still don't get really why Bank A in Country A can't reach Bank C in Country C directly but has to go through not one but many Banks B1, B2,... in between and in many countries.

To some extent, I think the confusion is because the different entities involved in an end-to-end payment want to put a lid on top of what exactly they're doing even from the entity immediate upstream or downstream of themselves. In other words, at the risk of hinting at some kind of conspiracy, the industry takes the motto of "keeping the customer transparent" to the extreme!

Fully agree. As for contents of a typical leather wallet, I see a strong resonance between what you've said here in words with I'd said by way of a picture at the bottom of Mobile Wallets: Fix What's Broken - And It Ain't Payments. On a side note, my post is dated before the launch of Apple Pay. Going by your experience, leaving your physical wallet at home is not any more feasible now than it was before.

According to this BBC article from BBC, cash is growing, not dying:

1. In the seven countries ... — Australia, Austria, Canada, France, Germany, the Netherlands and the United States, 46-82% of all transactions in 2012 were conducted using cash.
2. In the United States, cash in circulation grew 42% between 2007 and 2012, and the amount of American money floating around in bills and coins is expected to grow by about 5% each year. The average growth globally is 7% per year.
3. ...card payments in the Netherlands have been growing by about 8% annually over the past few years. And yet, cash is still king. In 2012, there were 2.7 billion card payments, but an estimated 3.5 to four billion payments were made with cash.

So much for the death of cash - it's not only not dying but it's actually growing. All over the world. Even in Sweden and Denmark - "leaders of cashless crusade".