Mapping the Intermediate: Lived Technologies of Money and Value

Guest editors Mrinalini Tankha, Portland State University and Ursula Dalinghaus, Ripon College of  "Mapping the Intermediate: Lived Technologies of Money and Value," Journal of Cultural Economy, Volume 13, 2020 - Issue 4

ABSTRACT

As financial transactions are increasingly digitized, old and new kinds of intermediaries are only expanding in importance. Intermediaries, mediators and brokers sit at critical junctures and operate between diverse financial arenas and pathways. We argue that mapping the intermediate entails identifying how different kinds of actors—human and non-human, objects and interfaces, institutions and practices—delimit or reify but also stitch together and overcome spatial and temporal differences in people's financial lives, while taking on varying burdens of risk. Mapping the intermediate is both an empirical and methodological exercise. Empirically, it requires following the agents and traders, brokers and material objects that facilitate transactions and add, extract, or re-work different kinds of value. Methodologically, intermediaries and the intermediate are not only the objects of analysis but act as analytical tools in their own right, making the process and politics of transactions visible and tangible. Attending to the intermediate in our inquiries around money, currency and new digital financial technologies, thereby, offers new directions for grounding finance in politics and history and better connecting micro and macro and local and global economic processes.

Read the complete introduction here: "Mapping the intermediate: lived technologies of money and value"

Access complete articles: Journal of Cultural Economy, Volume 13, 2020 - Issue 4

The comfort of cash in a time of coronavirus

(Financial Times)

Bill Maurer cited in "The comfort of cash in a time of coronavirus" by Brendan Greeley | Financial Times JULY 16, 2020 | 7:49 PM

Bill Maurer, an anthropologist at UC Irvine who studies payments, calls the decision to withdraw cash “contextually rational.” It’s not that people are worried about how the Fed distributes cash, he says. It’s that, as in any disaster, people are worried about everything else — the electrical grid or the mobile network. … Holding on to a stack of bills, says Maurer, is “the recognition that in a pinch I can use cash and it will work with anybody.

For the full story, please visit Los Angeles Times: https://www.latimes.com/world-nation/story/2020-07-16/cash-coronavirus-covid19

Consumer Finance Research Methods Toolkit - 2020 Update

by Erin B. Taylor and Gawain Lynch, Canela Consulting

The Consumer Finance Research Methods Toolkit (CFRM Toolkit) presents cutting-edge approaches and methods being done across different sectors of finance. We give practitioners a starting point to think about how they can improve their research and prepare their organisations for the future.

CFRM Toolkit 2020

ABOUT THE CFRM TOOLKIT
This toolkit was produced as part of the IMTFI’s Consumer Finance Research Methods Project. It demonstrates how different methods are being applied in finance research to help both for-profit and not-for-profit organisations cope with rapid changes in the sector. It is designed to help researchers and managers to:

• Learn about innovations taking place in consumer finance research
• Understand how to use research to improve their organisation’s strategy
• Facilitate connections between researchers and organisations with complementary expertise

Just as consumers have an ever-increasing choice of financial products, researchers have an ever-increasing array of methods at their disposal. This Toolkit provides readers with inspiration for ways they can develop their research, either by themselves or in collaboration with others. Readers can choose to learn about applications that are familiar to them, or discover entirely new methods and professionals who practice them.

WHO IS THIS TOOLKIT FOR?

The CFRM Toolkit is intended for use by anyone who needs to adapt to the new global finance market:

• Innovation specialists
• Research and design teams
• Organisations and companies
• Individual professionals
• Instructors and students

User insight specialists, designers, NGO workers, policy specialists, and academic researchers are among those who may benefit from the Toolkit’s descriptions of how different methods are applied to a wide range of problems around the world.

Whether you work in the field, in a lab, or at home on your notebook, this Toolkit covers methods that are relevant to your research context.

FOREWORD by IMTFI Director Bill Maurer

When the first edition of this Toolkit was released in 2016, I asked, in my prefatory remarks, “Why a consumer finance research toolkit, and why now?” I wrote mainly of the explosion in new payment, financial and insurance technologies being introduced into social systems and markets around the world, often with unintended consequences, and often with little forethought on the part of their developers as to how these new technologies would impact the human side of money and finance. 

While I could easily make the same case today, three years later, it is striking how some things have changed quickly, and others, not at all. “Fintech” is now a word, and a business and investment space. The term was still relatively new in 2016 (and it wasn’t used once in the first toolkit!). 

But payment is still … boring, despite all the hype and new technology “deployments.” How many readers of this report have used Apple Pay a few times only to abandon it because of its lack of general availability, ease of use relative to cash or cards, or force of habit? How many have re-adopted it since purchasing a smart watch? And how has the cost of such devices pushed new payment technologies ever further up the socioeconomic hierarchy, leading many at the bottom back to cash? 

Cash, meanwhile, has been under assault, even as its continued use makes it seem more resilient than ever. In countries like the US and the Netherlands, for example, more and more merchants have gone cashless and celebrate their status as such. Realizing the exclusionary impact of refusing cash at the point of sale, municipalities and some states in the US have been pushing back, banning cashless stores. Cryptocurrencies have reached record valuations, only to plummet again, firing up the speculative imagination as well as generating much-needed skepticism. 

On the horizon: artificial intelligence is increasingly being used to predict consumer behavior and price risk—and will potentially unleash new forms of discrimination and injustice. The presuppositions of the post-World War II liberal order are under assault and the regulatory frameworks guaranteeing fairness and accountability are being rolled back at a rapid pace, making more urgent than ever the responsibilities of the business community to ensure fairness, equity, and even financial justice.

Money and payment have opened up for political and social discussion as never before. Since the dawn of agricultural states in the ancient Near East thousands of years ago, accounts-keeping has been central to the allocation of resources in complex societies. You know something interesting is afoot when respectable journalists or government officials question the long run viability or existence of physical banknotes, or even state issued currency itself. In the United States, we have not seen such enervated discussion over the nature of money since the greenback/goldbug political conflicts of the late 19th century.

It is curious, then, that we still have to remind those working to create and introduce new money, financial and payment systems into the world that such systems are used by…. people! And people use them in systems that are simultaneously social and technological, systems that they use by choice or necessity to meet their basic day to day needs, while also using the technologies of money—from cash to Venmo to WeChat Pay—to make social connections, honor the dead, fulfill religious obligations, or make political statements. 

How people do money is often more significant than what money is, and the debates over what it is are almost always grounded in the ways that people use money and its associated technologies to get by and make do.

This updated toolkit provides a roadmap for a deep and nuanced understanding of the ways people do money, and the ways technologies are complexly integrated into existing sociotechnical arrangements. Approaching these questions requires guides to careful research, like the ones presented herein, and a small degree of hubris. 

The future is hard to predict—but it is surely a future of humans making meaning and social relationships with one another through consumer financial technologies and systems. The methods provided in this toolkit help us get a handle on how they do so, and to what ends. 

Access CFRM Toolkit 2020 at the following LINK. 

What’s next: The future of cash - The death of dollars has been greatly exaggerated

by Pat Harriman, UCI | July 8, 2020

Contrary to popular belief, COVID-19 does not mean the end of cash. Although there was some concern during the early stages of the current crisis that paper money might transmit the virus, its demise had, in fact, been heralded by many people even before the pandemic began. Despite the convenience of plastic, the sense of safety with contactless online payment systems or the allure of cryptocurrency, however, there are still situations where dollar bills are best.

Bill Maurer is dean of UCI’s School of Social Sciences, a professor of anthropology and director of the campus’s Institute for Money, Technology & Financial Inclusion(IMTFI). Here, he provides expert insight into the driving factors behind – and implications of – eliminating physical currency, the changing uses and social relations of money, and the enduring appeal of cash.

The general public has been hesitant to handle cash during the pandemic. What does this mean for its future?

The King James version of the Bible uses the phrase “filthy lucre” five times, so money has long been associated with base motivations. While all kinds of germs and bacteria can survive on bank notes, they are not an efficient means of transmission. My concern is that if people associate dollar bills with disease, they’ll stigmatize those who – out of necessity – use cash. These tend disproportionately to be poor people, recent immigrants and refugees, people of color, the homeless, the elderly and the disabled.

As far as other payment methods are concerned, there’s some evidence to suggest that coronaviruses survive longer on plastic and metal. If you think about all the fingers that tap on point-of-sale terminals or hand-held wireless devices, those might be a greater risk. The epidemiological advice is the same as for everything: Wash your hands after you touch stuff.

If the pandemic isn’t the catalyst for all the talk about eliminating paper money, what is?

The drive toward cashlessness is mostly driven by two factors: fiscal concerns over revenue collection and industry interest in capturing additional data about people’s lives. If you’re a state tax authority, eliminating physical currency means that transactions have to pass through a bank or other institution. Despite secrecy rules and privacy regulations, if they have due cause, officials can still peer into people’s financial affairs.

For the Big Four platform companies and smaller digital services, going cashless offers a view into users’ offline spending. If you use cash at a physical till, there’s no data capture; but if you tap and pay with your watch or phone, platform companies all of a sudden know a lot about what you’re doing in the physical world. That’s a treasure trove of personalized information to use in targeted marketing, risk assessment and pricing for things like loans, as well as for predictive models to identify trends.

Can currency be completely replaced by plastic – credit and debit cards?

In the U.S., it’s not going away anytime soon. We have a very high level – 15 to 30 percent – of people who have no bank account or have difficulty maintaining a minimum balance, cycle in and out of formal banking services, or rely on check-cashing services. As a result, they live in a cash economy. Another reason is that when there’s a natural or manmade disaster, paper money becomes absolutely essential to community resiliency. When all other infrastructure goes down, dollars still work as a store of value and means of exchange.

And ironically, with every new digital or mobile payment innovation, we’ve seen cash demand go up. Apps linked to bank accounts make it easy to buy something or split a restaurant bill, so many people who use these apps withdraw money from ATMs as their “savings” because they can lock it in a drawer and eliminate the temptation to spend it.

What are the disadvantages of eliminating paper money and metal coins?

The biggest disadvantage will be the economic exclusion of the poor and underserved. Another implication is that eliminating paper money will more easily allow central banks to lower interest rates below zero. When the interest rate is close to zero or below, people start taking their money out of the bank and put it under the mattress, which acts as a kind of brake on further lowering the interest rate.

While eliminating cash would give the central banks more tools to deal with monetary and financial crises and also allow for relief payments to be made much easier via digital channels – so long as the government provides one for all people to use, like the FedAccounts proposed in an early version of the CARES Act – it also concedes a lot of power to them.

Do you think widespread concern about cash and germs will boost the credibility and popularity of cryptocurrencies such as Bitcoin?

Interestingly, as stay-at-home orders were being issued and the extent of the pandemic was becoming clear in early to mid-March, Bitcoin investors dumped their crypto and converted it into U.S. dollars. There have been ups and downs since then, but the overall trend has been to dump cryptocurrency, along with a more general flight to more liquid assets like the U.S. dollar. And I bet a good many of the people who sold their crypto ultimately converted it to cash.

Read original post in UCI News: https://news.uci.edu/2020/07/08/whats-next-the-future-of-cash/

Electronic banking fraud in Nigeria: how it’s done, and what can be done to stop it

By IMTFI Fellow Oludayo Tade, University of Ibadan, in The Conversation

Stefan Heunis/AFP via Getty Images

Six years ago, a cashless policy became fully operational in Nigeria. The aim was to encourage electronic transactions with a view to reducing the amount of physical cash in the economy. The logic was that this would minimise the risk of cash-related crimes.

But a major downside of the policy has been pervasive electronic banking fraud (e-fraud). Although the cashless banking system was designed to foster transparency, curb corruption and drive financial inclusion, it’s threatened by the growing perpetration of fraud.

About N15.5 billion was lost to bank fraud in 2018. About 60% of the fraud was perpetrated online owing to available internet-based and tech-rated banking services.

Our research investigated dimensions of electronic fraud in Nigeria. We found three: internal fraud carried out by banking staff; external fraud carried out by ordinary Nigerians; and collaboration between fraudsters and banking staff.

We found that inefficient supervision, non-performance of oversight by regional heads of banks, and poor follow-up on customers’ addresses (Know Your Customer) accounted for the fraud that took place.

Our study provides the banking industry, banking public and investors with critical pointers on how to reduce fraud.

Read more about the different types of fraud and recommendations in the full post here: https://theconversation.com/electronic-banking-fraud-in-nigeria-how-its-done-and-what-can-be-done-to-stop-it-141141

Access research publication: "Dimensions of Electronic Fraud and Governance of Trust in Nigeria’s Cashless Ecosystem" by Oludayo Tade and Oluwatosin Adeniyi in the International Journal of Offender Therapy and Comparative Criminology (IJO).

Here and there? Mobile money and the politics of transnational living patterns in West Africa

by Solène Morvant-Roux and Anna Peixoto-Charles, University of Geneva in Oxford Development Studies (Volume 48, 2020 - Issue 2)

Ouagadougou, Burkino Faso. Photo credit: Solène Morvant-Roux

Abstract
The authors examine the use of mobile money in the context of cross-border remittances in West Africa. Relying on mixed methods and a multi-sited empirical strategy they look at both the sending and receiving conditions of mobile money transfers. By looking at money as socially embedded and the role of migrants in the production of a transnational space, their results highlight that uptake and usage of mobile money for remittances are shaped by a transnational living pattern. At the same time, mobile money also contributes to strengthening and reshaping this pattern. By showing that conversion of virtual money to cash may be performed by brokers that live far away from the end recipient, the paper highlights an important gap between spatial distribution of mobile money infrastructure and the social mediation that supports e-money flows. Cash-based transactions, in turn, are shown to play a key role in the social mediation dynamic.

Select Citations
"According to Leon Isaacs (cited in Heyer & Mas, 2010), 65% of the 23 million African migrants are regional as opposed to trans-continental migration with West Africa hosting major sub-regional corridors. Côte d’Ivoire is one of the countries with the largest long-standing diasporas from neighboring countries. This is especially so for the Burkinabè diaspora which accounts for almost 2 million people (IOM 2018) compared to the total population of Côte d’Ivoire (at 23 million). This migration flow is mainly composed of rural males leaving their village to settle in a more dynamic agricultural region in Côte d’Ivoire. Remittances between the two countries are a major component of the flows between migrants and their family members in Burkina Faso (IOM 2018). This shows that despite an old migration corridor (existing over several generations) that allowed migrants to invest in lands and houses in Cote d’Ivoire, Burkina Faso still appears to be considered their ‘home’, at least partially."

"Our findings highlight that while the spatial spread of MM retailers (supply) is impressive in sending and receiving settings, the social spread of MM in Burkina Faso exhibits a much more complex web of in-between informal brokers. Far from the person-to-person transaction and beyond issues of proximity, MM sending and receiving patterns are strongly shaped by the migrants’ transnational living pattern (distributive livelihoods) as well as the imperative to maintain community membership over the long run."

"With MM transfers, migrants can play a more active role in daily expenses or timely responses to financial difficulties without it being communicated to others. Previous to MM access, migrants would not have been able to quietly send money to their children for school in their home country, or for family events without it being known more widely. In interviews, they described: ‘we were neither able to send our children to our home country school nor to take part to family events because we had to rely on intermediaries who are always indelicate.’ Discretion is key: ‘Unless you talk, these transfers remain secrets’. "

Read more on the research findings in the full paper in Oxford Development Studies:
https://www.tandfonline.com/eprint/XEASAXJXRE53RWBIVQE7/full?target=10.1080%2F13600818.2020.1770208&

Read up on original IMTFI-funded research project: "Cross-border Transfers as a Strategic Tool to Promote the Diffusion of Mobile Money in Rural Areas. The Case of Burkinabe Diaspora Living in Ivory Coast".

Digital Transformation in the Age of COVID-19: What Should Credit Unions Deliver?

by Bill Maurer and Scott Mainwaring, Center of Excellence for Emerging Technology at UC Irvine

The old era of neighborhood branch gathering places no longer looks tenable as a new era dawns of self- and curbside-service, constant online connectivity, and conversation in virtual spaces.

Digital transformation is here with a vengeance, whether we like it or not. The global COVID-19 pandemic has people paying with mobile apps instead of cash, applying for and receiving assistance online, and coping with anxieties around housing, employment, debt, and even bankruptcy. The cascading consequences of the pandemic means that credit unions must urgently engage with business reinvention in order to continue their mission of service to their members’ financial well-being. How can this mission be sustained even as online becomes the dominant way they deliver products, offer support, and work with members to solve problems?

We have been researching the implications for credit unions of emerging technologies that use so-called artificial intelligence techniques to support “natural” conversations, though text, voice, and/or graphics, between people and artificial agents that more or less pose as people in enacting a service. Amazon’s Alexa and Apple’s Siri are well-known examples, through financial service-specific versions like Bank of America’s Erica have also launched.

As social scientists, we start from a broad set of questions about how people experience and expect these systems to behave, both positively and negatively. And for these “conversational agent” technologies, we start in particular with questions of intimacy and empathy.

Intimacy of AI
In 2018 the popular parenting website BabyCenter released results of a survey it conducted on new parents and their use of AI assistants like Alexa and Siri. The results were striking—seven in ten parents own a smart device; and a third of those said that having one made them a better parent. 22% percent said their virtual assistants are “like another part of the family,” and 42% of device owners say that they speak to their virtual assistants like an actual person. The “intimacy of AI,” as AdWeek calls it, seems inevitable.

Voice and AI aside, intimacy is already central to smartphones themselves. These personal and personalized devices are our constant, daily, bodily companions. Add an always-available virtual assistant to chat with, and our relationship with our phones—especially in a time of social distancing—becomes even closer.

“Intimacy” from virtual assistants being rolled out by the big banks is threatening to credit unions precisely because credit unions have historically prided themselves on the quality of their customer service and their knowledge of their members. Take Bank of America’s Erica. Via your smartphone, she can help you plan a spending path, manage your expenses, alert you to when bills or other recurrent payments are coming due, give your FICO score, and even provide rudimentary credit counseling.

If interactions with financial digital assistants are to replace person-to-person conversations with customer service agents, is the credit union system back in a familiar position of trying to play catch-up with the big banks and their big pockets? Not entirely – to employ new technologies that put people first, credit unions have advantageous positions as member cooperatives that place well-being over profits.


Continue reading about intimacy, empathy, and opportunities for credit unions in the age of COVID-19, full post on the Filene Research Institute blog available here: https://filene.org/blog/digital-transformation-in-the-age-of-covid-19-what-should-credit-unions-deliver