Does cash have any chance of survival in the digital age? And what are the risks of mobile payment? Just in time for Black Friday, when many consumers are becoming aware of the topic of “payment” again, we interviewed Prof Dr Laxmi Remer, Professor of Finance, about the change and the future of payment.
CBS: Mobile payments are becoming increasingly popular in countries such as China and the US. What is the benefit of this payment method?
Prof Dr Laxmi Remer: Whilst it is an increasingly omnipresent facet of the business world, mobile banking is of particular benefit to small businesses and the ‘under-banked’ sections of the community. Advances in technology, economic scalability, the increased simplicity and use of smart phones to conduct transactions facilitates the ever-increasing popularity of this method of conducting business. One does not anymore need to go to a physical bank or ATM to organize most forms of payments. The convenience and outreach of this technology is well suited to the current lifestyle of the planet inhabitants.
CBS: What opportunities and risks does this technology offer?
Prof Dr Laxmi Remer: It allows access to a wider customer base whilst maintaining a more personalized touch. It is very convenient and easy to use. It allows individuals to trade in a wide variety of products and services in real time and also allows payments for physical delivery of goods and services like paying for cinema tickets. Very importantly it is affordable to most.
One of the most threatening risks is the security issue surrounding transactions and accounts. Hacking, malware, tracking programs etc. can be issues of contention.
CBS: What is the future of cash money?
Prof Dr Laxmi Remer: According to an Ernst and Young article “Why the potential end of cash is about more than money”, replacing fiat currency as we know it, is possible, but will create unwelcome economic and political situations. In many countries, cash is still king. However, cashless transactions are increasing very rapidly around the world permeating all walks of life. Since there is demand for both cash and cashless transactions one could expect to see some sort of a co-existence of the two.
CBS: Mobile payment is only one digitalization trend in the financial world. What other changes do you expect?
Prof Dr Laxmi Remer: The increasing importance of crypto currencies to conduct secure online transactions is being recognized by many in the industry and markets. Increasing investments in AI technologies are disrupting business models as we know them – like Amazon taking over the shopping experience. Self service banking, blockchain technologies, money transfer etc. are areas where fintech unicorns are being nurtured by capital inflows.
CBS: Since last semester we have been offering the study programmes “Finance & Management” (Bachelor of Science) and “Global Finance” (Master of Science). How do they prepare students for these new market conditions?
Prof Dr Laxmi Remer: Our study course offerings make students aware of the developments in the digital world with subjects like New Age Financial Markets and Institutions, Financial Instruments among others. We also offer electives which allow students to choose topics in digital advancements in the industry. Together with guest lectures and inhouse courses, our students are well versed on the current topics in the field of finance.
CBS: Thank you very much for the interview!