The many ways to spend money

Recently I  got a bill in the mail from my local council for a special “white goods” collection service. The only payment option was by cheque!  What happened to more modern methods like BPAY  (a payment method allowing Internet banking or telephone banking payments to registered merchants).

I had to retrieve my cheque book (yes I still have a cheque account!), write the cheque, address an envelope and attach a 60 cent postage stamp, insert the cheque and invoice, and put in my backpack to post on my way to work. This incident got me thinking about the many ways to spend my money and wonder about the future of payments.

In my school days I operated with cash. If I wanted to  buy something I would pay be cash. If I did not have enough cash on hand I would make a withdrawal from my savings account. Once Automatic Teller Machines (ATM) became available there was less need to go inside a bank.   The alternatives for sending money in the post was to get my mother to write a cheque (I would have to pay her back!), purchase a money order a the post office, or for larger amounts, go the bank and purchase  a bank cheque.

When I was at university, I got a cheque account with Westpac.  This now gave me the convenience of not requiring  cash to make large payments and for sending money in the post. Now that I had a cheque account I discovered the world of bank fees, and stamp duty (now abolished on personal cheques).

After I started working I applied to Westpac to get a Bankcard credit card.  Now I could make purchases without needing money at all! When making a large purchase on Bankcard, the shop keeper had to ring the Bankcard centre and get a telephone authorisation. This was before the days of the electronic terminals at shops.  I just had to pay the amount owing at the end of the month otherwise interest charges accrue.  I would receive Bankcard statements in the post which I would reconcile against the yellow slips of paper with the record of sale. Sometimes I would pay the monthly statement by cheque which had to be done early enough before the deadline as well as adding the cost of postage.  An alternative was  to queue up at the bank in my lunch break and make the payment.

The Bankcard disappeared many years ago, and now I use Mastercard. The credit card is a very useful payment device for shopping online. I often buy books and ebooks from Amazon or Abe Books, sheet music download, iTunes music purchases, and eBay purchases. These are all made with the convenience of credit card.   And speaking of eBay, I am reminded of the PayPal system which is another way of making purchases online by connecting your PayPal account to a bank account or credit card.

The next innovation was Telephone banking. This system was very fiddly and time consuming and required a lot of patience punching in numbers on the phone to select account numbers, passwords, merchant codes and so on. Once the transaction was complete, a receipt number was given by a computerised voice.  I avoided telephone banking as it was too fiddly.

The BPAY system was an innovation from banks allowing companies, local  government and utilities to make payments easy. Each organisation has a number and each customer has a number. These details could be used for payment over the telephone, and now through the internet.

The arrival of Internet banking is my favourite innovation in personal banking. Now I can log in to my accounts, check the transaction history, make payments with BPAY, move money between accounts or move money to any account in Australia.  I prefer downloading my statements as PDF files in favour of receiving paper statements.

A convenient way to pay bills is to set up automatic deductions from my account for regular expenses such as electricity, gas, mobile phone and insurance policies. Why should I waste my time and remembering bills when I can set these up automatically?  The only bills I don’t  automate are my credit cards as I like to decide how much to pay each month.

So how will payments be made in the next ten years? I expect to keep using my credit card but I would like to see other convenient methods such as using my smart phone as a payment device. I find it frustrating that I have to use a credit card in a parking meter . Could it be possible to link my phone with a payment application?  Maybe the phone could become a device with some pre-stored value, something like the Telstra telephone card I used to use before mobile phones?

We have got used to e-Tags in our cars which eliminated the need to pay tolls by cash on the Sydney Harbour Bridge and the Tunnel . I would have thought a system to scan the car licence plate would have eliminated the need for the special E-tag device?

I did read that Cheque accounts are almost extinct. I am sure the bank notes and coins will be in use for many years to come.

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