Friday, June 21, 2013

Wither Cash?

A thought occurred to me today.

I have found this new app for my iPhone called Tabbedout.  With it, at bars and restaurants that use it (and there's two in my small town), you open the app, touch the name of the business you are at (it uses GPS to find near ones), touch "Open tab," show the code to the server/bartender, and order your food/drink.  Everything you order goes on your tab which you can see on your phone.  When you're ready to leave, you pick a tip rate (with a difficult to use slider; only thing I don't like), it calculates the tip, you hit "pay tab" and walk out.  This is very convenient for both the patron and the business.  The patron doesn't have to sit around waiting for a check or a tab tabulation.  The business doesn't need to have an employee spending a lot of time figuring out a tab or delivering a check, then going through the whole credit card or cash pay thing.  I hope more restaurants and bars start using this service.  Also (and I haven't done this yet so I'm not sure how it works) if you want separate checks (and everyone has Tabbedout), you set up one tab then somehow on the phone say who bought what and each person pays their own tab.

You put your credit card information into the app once so that the bill is charged to your card. But here's the thing: we pay our credit card online right out of our bank account.  And money enters our bank account mostly through direct deposit (except for my freelancing and royalty payments come as a check). Neither cash nor check are ever handled in this transaction.  And it's the same for my Starbuck card app that is "re-filled" from my credit card.

So how long until cash and/or check are obsolete and every transaction is handled electronically? And your wealth is just numbers in a computer (it pretty much just is now if you have money in a bank or a brokerage account)?

The downside I see is the government could easily track every bit of money you have coming in, so doing something "under the table" will be impossible.  It might make crime harder but it will make taxing way easier.  Whatever happens, it'll be interesting.

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