With the Canadian Mint abandoning the mighty penny and Amazon creating its own digital currency system called Amazon Coins (to be used to purchase apps in its Kindle Fire Tablet), where is cash heading?
In May, Amazon Coins will flood the market with “tens of millions of dollars” of virtual coins. The Canadian mint will remove the equivalent in copper. This value transfer from cash coins to promotional coins is not connected but illustrative of the value of currency to drive engagement and what is often referred to as “big data.”
The penny and the dollar have not lost their value in our digital economy (*) but the ability for the data behind our purchase behavior may yield more value.
How we buy has changed so profoundly over the past few decades. Money and path to purchase has become more fluid. Days waiting for cash to clear is now instantaneous. Digital credentials such as Paypal and Paypass allow for seamless payments inconceivable few years ago.
We know that financial institutions and the new mobile wallets snub their nose at cash and hope that all transactions move through their gateway and pay a service toll. But more importantly for the Google’s and Apple’s wallets to tether a digital relationship that allows for incremental advertising and engagement opportunities.
As we move into digital wallets in the cloud and the store, look for more “Amazon” pennies from heaven. Or in this case, from the cloud.
* (Cash is a clumsy system and removing pennies can upset the countries cash register. In 1971 the penny was axed in the UK. Cash confusion and many retail that were accused of rounding up rather than down allowed price increases that pundits attributed to increased inflation in the country for a quarter of a century. By the 70s, inflation was upward of 25%.)