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Are data privacy concerns helping to rebrand cash?

Posted by: Hugh Tallents on July 18, 2013


Your parents told you not to carry too much of it. Credit card companies are trying to get rid of it. Environmental good sense tells us to stop printing it. In fact in 2011 the US Treasury produced fewer $5 bills than at any time in the past 30 years and stopped production on the $10 altogether. About 50% of transactions are now conducted in cash, down from over 75% in 1996. Cash use has long been in decline.

But it might well be back.

What was once seen as clunky, dirty and inconvenient has started to be seen as a safe haven for those unwilling to part with a different kind of currency that corporations crave – your personal information.

Consumers are waking up to what has been true for a very long time. When you pay for something with your credit card you are likely giving up more than the cost of those sneakers or groceries you just swiped your card and walked out the door with. Most people don’t understand the nature and quantity of the information they give up in every transaction and just how valuable that data is. The NSA Prism program shines a glaring spotlight on the market for data. IBM is openly talking about using it to make things smarter, Microsoft launched a “Scroogled” campaign to highlight Google’s use of it. Facebook has had their feet held to the fire about their approach to personal information. It is becoming a corporate battleground that could have profound influence on consumer choices.

The publicizing of this issue by businesses is contributing to the same reason why cash can potentially see a re-emergence. Consumers already had to deal with potential fraud and ID theft. Now they are realizing the value of their information and how businesses are starting to use it, they expect reciprocity from companies for giving it to them. Consumers equate their information to a currency and they want something valuable in return. A more tailored advertisement is not really the answer for most people, they expect more than that.

Interbrand research shows that consumer perception about data and its usage is not as binary as “I am okay with it” or “I feel like my privacy is being invaded.” People are starting pull apart the different ways that their data is used – whether in aggregate (true “big data”), specifically for people with similar profiles and preferences to me and lastly for me individually. The more specific the usage gets the greater the expectation of reciprocity and the greater the fear for consumers that the information will be misappropriated. These benefits need to be constantly updated and ever changing - expect to see wholesale changes to the loyalty points and affinity industry in due course.

Businesses are currently obsessed with big data and its commercial possibilities but might not be appreciating that there is a human at the end of that binary string. The role of the brand is to help the business understand not only the need to provide a reciprocal benefit but give insight into what those use cases and benefits might be. Brands that expect their customers to freely and willingly, allow their data to be used must be prepared to do the work to understand what those customers want in return and be prepared to continue to deliver an ever evolving set of benefits for as long as they expect to use the data. This is not a case of one-off offers, it is a relationship based on trust that requires constant reinforcement or people will close ranks around their information and, almost as importantly, the methods of payment that expose their information to companies.

What businesses forget is that cash is a technology that the consumer is very comfortable with. It is trusted, it is universally accepted (the $100 bill is one of the US fastest growing exports!) and in the medium term competitors may need to be comfortable with the fact that customers want it to co-exist with more modern payment technology. One way to accelerate the decline of cash is to bake real reciprocity into every interaction. Until that time consumers will not only view this black market for 1s and 0s skeptically, they will potentially view the transactional anonymity of cash as making it safer than digital or credit in many transactions.

Hugh Tallents is Senior Director, Strategy, Interbrand New York.

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