Money makes money

Following on from last post, clearly one of the key benefits of digital cash is that it does not incur transaction fees. This is the main method of monetization for services currently providing cashless transactions. The digital cash concept is not exclusively people-focussed/altruistic; there are ways to make an on-going business out of it. Here are the obvious ones off the top-of-my-head. I’m sure there are lots more (?):

  1. Affiliate fees. The validator site can also function as a free service, able to connect to your bank(s), retrieve your bank account details/transactions and provide value-add services with the data e.g. Mint. In particular, would allow you to see where your money is being spent and give you hints on how to save money. Money would be made through affiliate fees/recommendations.
  2. Marketing. Digital cash contains with it, details of what was bought, when and for how much. Analytics analyse consumer transaction patterns, build spending usage pie charts and suggesting relevant ways to save or make more money via competitive offers. Marketing managers would purchase the analytics to analyse usage patterns, create marketing campaigns and target specific demographics and customer types e.g. through Google AdSense. All of this would be tied to the (anonymous) cash rather than the individual.
  3. Purchase sharing. A modish site (Blippy) enables the controlled sharing of purchases to see what others are buying online and in real life. Blippy lets you share purchases by syncing already existing e-commerce accounts e.g. iTunes, Netflix, Woot, eBay. It is thought to monetize through turning links on Amazon purchases into referrals/featured vendors. Analysing purchase data is a gold-mine for analytics/consumer behaviour insight. Card companies cannot share this information but having consumers proactively share with others overcomes this obstacle (and when aggregated sold on). Facebook’s Buy With Friends feature works in a similar way for virtual goods only. Purchase sharing in general is a great way to drive group buying behaviour e.g. Groupon.
  4. Exchange service. Digital cash could be freely exchangeable into physical cash and vice versa. Existing currency exchange outlets would have the infrastructure for this and this would afford them a new revenue opportunity. Also a non-monetary currency exchange could be established. There is a trend toward metacurrency: treating movement of non-monetary flows of attention, participation and trust e.g. frequent flier miles, college degrees/grades/credits, five-star ratings, certifications, bus passes, votes, your eBay rating, scores, coupons much like physical cash. Transactional commission may be made on converting between these. Obviously you cannot buy votes or college degrees but it is certainly possible to buy coupons or frequent flier miles.
  5. Banking. Digital cash being essentially being stored in a personal data locker – free secure cloud storage identified to you. As with a regular bank, it would store your digital cash for when you need it (download to your wallet) and (like banks) make money by market speculation.
  6. Loyalty/payment card service. Existing proprietary loyalty/payment cards such as those operated by Tesco and Starbucks respectively could be outsourced to a new consolidated, cheaper service. Anonymity could be preserved with this new solution and subscriptions could be charged to the store.

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