This month, Spectrum published a special issue on the decline of cash, as we watch more and more transactions go digital. We admitted, however, that it’s going to be tough to let go of cash entirely, because nothing offers so much privacy, for one. And no one has really solved the question of what will happen to the unbanked, that is, people with minimal incomes or other issues that prevent them from maintaining a bank account or getting a credit card.
So cash continues, in spite of the technologies that are reducing how much cash we carry and how often we use it.
In our special issue, “The Last Days of Cash,” we explore what it’s like to try to live without cash. Pretty tough. We didn’t take on the mirror-image problem of what it’s like to try to just use cash. Turns out that’s pretty tough as well; it’s a little tricky to shop online with it, or to trade it for virtual goods. It’s sometimes possible; eBay, for example, allows some, but not all, purchases to be processed by money order. But it’s not easy. And just figuring out if it’s possible at a particular online retailer is tough enough to pretty much discourage online shopping with cash.
I didn’t really think anyone was trying to fix this problem, to make a bridge between the cash economy and the online world, until I met the folks from startup ZipZap at Launch Silicon Valley this week. They think they know how to create a complete, international, system for enabling cash payments for online transactions, and have gotten pretty far along implementing it.
Here’s how it works. Participating online retailers include a “cash” option on their checkout screen; clicking on that link takes them to ZipZap’s network which generates a voucher detailing the payment. The user prints out the voucher and takes it to a nearby retailer—CVS, Walmart, and 7-11 are already participants—where he hands over the voucher and the cash. The local store sends payment confirmation to ZipZap’s system, which then completes the online transaction. The online retailer sets an expiration date for each type of transactions—a user might have several days to complete a purchase of Facebook credits, for example, but only a few hours to finish buying an airline ticket. Zip Zap’s CEO Alan Safahi says the company is already working with American Airlines, Herbalife, Facebook (in Russia only), and several other companies; it is partnering with companies that already process cash payments from networks of retailers, including MoneyGram in the United States and Cyberplat in Russia. ZipZap is already live, and expects to have a million locations (in the U.S., Russia, and Brazil) accepting payments by the end of this year.
Tekla S. Perry is a senior editor at IEEE Spectrum. Based in Palo Alto, Calif., she's been covering the people, companies, and technology that make Silicon Valley a special place for more than 40 years. An IEEE member, she holds a bachelor's degree in journalism from Michigan State University.