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In this day and age of StanChart-Iran-AML-Sanctions-FATF-SAR-etc., I love the quaint and old-wordly notion that money laundering and other nefarious activities happen exclusively through cash.

According to a recent report I remember reading, cash is by far the cheapest of all MOPs accepted by merchants.

According to this machine-translated article, Sziget used a closed-loop contactless card for payments at the festival venue. Such systems have been working fine for over 5 years in many "closed" spaces (e.g. all cafeterias of a Top 5 UK Bank). I doubt if they'd ever take-off in an "open" cashless society - how many people would be willing to carry a stack of closed-loop cards, one for each store they visit?

Visa PayWave... MasterCard PayPass... American Express... ExpressPay... Google Wallet... SQUARE... PayPal... ISIS... etc. etc. I suspect they'd consign one another to history before consigning cash to history.

If the students using this service are digitally native enough to (1) have a smartphone, (2) have a QR code reader app installed on it, and (3) know how to scan QR codes, I'm not sure why they'd bother to visit the physical store in the first place and, that too, during peak season? Why won't they simply order online from their homes? To quell any doubts, I checked and confirmed for myself that Co-Op does have a website that accepts online orders. 

@AnnaZ:

I heard the expression "anti marketing trifecta" yesterday in the context of how difficult it is to market a product / service that advocates prevention, isn't a fun topic and calls for a change from regular behavior.

It just struck me that, in its present form, risk management seems to exhibit these three traits: The first trait is obvious. The second one is at least true among executives. The third trait is strongly indicated by the following attributes of risk management: (a) It advocates executives to be cautious whereas most of them tend to believe that "it will never happen to me" (b) It uses analytics (OLAP) whereas regular business is fueled by transactions (OLTP). 

To break out of the anti marketing trifecta, risk management could try to reposition itself as a cure instead of prevention. Some suggestions: (a) How to avoid appearing on the 6 o'clock news? (b) How to get away without paying that fine? Just joking!

@MattW:

Thank you for highlighting the connection.

@RaymondR:

It's only after reading Matt White's comment that I'm able to make the connection with a blog post titled Would You Like Your Photo On Your Banknote, Sir? that I'd written on my personal blog (link not supplied in order to comply with Finextra policy, but it comes up as the first Google search result). My post was largely triggered by your colleague Mr. Birch's article regarding the pace with which banks are moving foward with noncash methods of payments.

The stature of the risk management function will automatically rise if its contribution to bolstering a bank's short- and long-term revenues and profits can be illustrated with a few case studies. Without this, it may unfortunately remain unavoidable that "Risk managers are treated as an unavoidable evil".

Spectators are told 6 months in advance that they can't pay by cash and that only Visa will be accepted at Olympic venues. On the day they visit the games, they don't bother to bring cash and visit the stores with only Visa in hand. The stores tell them that they can't accept Visa and that they must only pay by cash. Spectators are unpleasantly surprised by this contradiction. Added to that, they're hungry and thirsty. Therefore, they let loose on Twitter and this becomes a trending topic. This proves that, in the world of Twitter, people won't keep quiet when they're ticked off. But, it doesn't prove anything about whether cash or cashless is popular - if you interchange 'cash' and 'Visa' in the above situation, the same sequence of events would've resulted in cash becoming the trending topic on Twitter.

Kudos to Aviva for developing this LBS app that makes brilliant use of accelerometer, GPS, and other standard smartphone features.

To answer the question posed in the title of this post: No compelling reason to use a mobile phone to make a payment. This FT article gives a highly credible set of reasons why M-PESA succeeded in Kenya and Tanzania but failed in South Africa and India. According to Vodafone India, M-PAISA never got off the ground in India, although the FT article refers to a pilot.

It seems to have finally dawned on the nonbank payments players that the retail payment value chain is not so simple and that it involves other players who have decades of experience in it. Better to join hands in a committee to get something done - sooner or later - than stay alone and waste time under the delusion of disintermediating banks from the retail payments business.

"A number of start-ups are trying hard to convince the world that the ability to pay for things with a phone is something we actually need ... Still, mobile payments aren’t big yet in the United States. Forrester, the research firm, predicts that the domestic market is three to five years from reaching critical mass." (emphasis mine)

- New York Times, August 7, 2012