Archive for April, 2008

My bank money is too sticky!

Like the vast majority of people I think, I have only two places where I hoard money.

The first one is my physical wallet The amount is not significant, but I could not do without it, yet. Money in it is not sticky, in the sense that it’s flowing efficiently and rapidly out of my wallet, sometimes too rapidly. So cash is nice, except for one thing, it’s reach is rather limited, I have to hand-out cash to make a payment and be physically connected. So I turn to this storage of money for standard use, buying bread, paying taxis,… When I want to replenish my physical wallet, I turn to my second pile of money: my bank account.

My bank account is indeed the second place wher I store money. The amount is more significant and certainly too high from a pure financial consideration. While replenishing my physical wallet by going to an ATM is a bit of drag, it’s all-in-all quite ok. Money is flowing relatively well between the two. In fact, most of the flow out of my bank account is done for standard payments like grocery, electronics,.. and is done via a debit card. There again things are not that bad and; at this point money is not too sticky.

But then, there are all this other flows or non-existing flows which show that my bank money can be very sticky.

In the category of existing flows where money is a pain moving, I’d put things like buying financial assets, making payments to a foreign friend. If you want to buy a financial asset that is not offered by your bank, you then see how sticky money is, you have to make multiple operations to complete your transaction. Sure, banks have a interest in making your money sticky, they would rather having you buy financial assets they provide. But even there, money is not flowing swiftly: what’s the point of raising customer satisfaction when your money is captive anyway. Concerning payments to a foreign friend, we reach the ridiculous: you don’t see money flowing, but evaporating through fees and time delays. Before we had PayPal, transfering money to a friend in another country was close to the non-existant category.

Which leads to the category of non-existant flows, or at least not existing yet. And here, I’ll turn again to my P2PMoney pet project. Leaving in a global world, with many interactions with a growing community of contacts, I think we will have more and more a desire to see our money freely and swiftly being pooled, spent and redistributed among varying groups we belong to. And for these workflows, bank money is flowing like a rock.

So we have now Telecom operators coming with the concept of a M-Wallet. While I don’t know how fast I’ll turn to this third type wallet, there’s one thing I’m sure: I don’t want my M-money to be sticky. And being not sticky does not mean money flows swiftly for transactions that are in the operators best interest, it means it flows swiftly for thing I want to do!