Cash is just a waste of money

Peer-to-peer offers data, saves time and hassle, says Square CFO

TORONTO• Cash has a cost. That’s one of the key messages that Sarah Friar, the CFO of rapidly growing mobile payments company Square, has for those still reluctant to embrace the digital payment revolution.

Sitting down to chat about the future of money at the Elevate tech conference in Toronto, Friar spoke about a town in Northern Wales with no bank branches — a more and more common reality outside of urban areas.

People think about cash as being cheap and simple, because there’s no middleman to take a cut, but Friar argued that driving to the nearest bank to do withdrawals and deposits, and then counting out the register at the end of every day has a real cost for merchants.

“Instead of focusing on your business, you’re focused on this thing called cash, and that has real economic cost to you,” she said.

Bringing modern, innovative payment services to under-served segments of the economy is core to Square’s mission, according to Friar, and the company is intent on helping to define the future of money.

“Two-thirds of our businesses in Canada had never accepted electronic payments before, and that’s exactly the value proposition we see in the U.S. it’s what we see in the U.K., it’s what we see in Australia.”

In fact, Friar said, 72 per cent of all Square sellers in Canada are outside of the country’s ten biggest cities.

Square got its start with a little credit card reader that plugged into the iphone’s headphone jack, but today the company offers a suite of financial services so broad that it’s starting to look something like a bank.

Square issues debit cards that link to the Square Cash App, which allows for peerto-peer payments.

Square Capital offers small business loans, and Square Payroll does pretty much exactly what it sounds like it does.

Unifying this all is the idea that in the future, financial transactions should be simpler, smoother, and they should generate all sorts of valuable data.

Cash is anonymous, which is useful in some contexts, but in the technology world, the mantra these days is that “data is the new oil” — and cash doesn’t create any data.

“When we have that sort of data and build that into our marketing and loyalty products that we have, just as part of your point-of-sale, we can start to hopefully help you make better business decisions,” Friar said.

“Don’t give away the 11th coffee for free; instead, how about you offer this particular buyer 10-per-cent off lunch, because they only ever come for breakfast. Let’s see if we can up-sell.”

Friar said customers won’t mind giving up that data as long as their privacy is respected, and they can see how it benefits them, even if the benefit is just as simple as offering up a better, faster payment system.

“You have to be able to show utility,” she said. “You have to be able to show both the buyer and the seller why it’s worth it for them to allow some tracking to happen, and if you don’t do that, there’s no way that people are going to give you that data to begin with.”