Money mashed-up

by David Birch

[Dave Birch] One of the functions of banks that has been changed forever by the Internet is what economists call the information function. People used to rely on banks to provide certain kinds of information into the market (eg, credit ratings) but a combination of technology-enabled business change and vanishing delivery costs has meant that they are themselves consumers of exactly the same information as non-banks. This is hardly new thinking — I can remember discussions a decade ago pointing out that some kinds of information were out of bank’s hands and that (given all sorts of constraints to do with data protection, competition law and so on) the operators of payment networks could use the “data exhaust” from their transaction networks to create information to “turbocharge” other businesses (it was the 1990s, remember). Indeed, I worked on a project for SWIFT to look at his kind of thing in (if I remember correctly) the late 1980s. The advent of web 2.0 means that this turbocharging is both technically trivial and incredibly powerful, providing ways to create new kinds of information that would never have been generated by banks internally nor made available to the market as a whole. A favourite example of mine, that I originally found thanks to our friends at Payments News, is that courtesy of the New York Fed you can see U.S. bank card delinquency by county, and thus get yourself a real-time map of the credit crunch sweeping across the nation, like bad weather.

The ability of the new technologies to “mash up” data sources must be one of the routes to genuine innovation. Visa and MasterCard must have “weather maps” just like the NY Feds: perhaps the Chancellor of the Exchequer should wake up each morning to a weather forecast from the payment processors instead of Claire Nasir. I say processors because, looking forward, they are the ones who will actually know how money is moving around the economy at the retail level. The consolidation of processors, in Europe as well as in the US, together with the steady shift from cash to e-payments means that some organisations will be in possession of pretty valuable information that simply does not exist in a cash economy.

It reminds me of one of my favourite case studies in contactless, Manchester City’s installation of the UK’s first all-contactless ticketing system at their Eastlands (now universally known as Middle Eastlands) ground. When paper went away, one of the major and unexpected benefits of the new system was that it produced information that did not exist before and this information translated directly into increased revenue (as Duncan Martin, head of retail at Manchester City, explains in that indispensable volume, Digital Identity Management).

Creating money is easy. The hard part is getting it accepted.
Economist Hyam Minsky (1986).

[posted with ecto]

print Print
Bill Maurer 23/12/2008 10:54:47

I am very glad David has raised the issue of mashups and mods. The anthropologist Keith Hart has written about the democratic possibilities of turning over the information collected in electronic money to its users. The artist Kate Bingaman-Burt puts an interesting spin on that information in her drawings of her credit card statements. But this goes beyond the information in new moneys. Many new money forms and channels have the derivative character of mashups or mods, and involve the laminating of money functions onto existing systems. This goes back as far as the magstripe transit card having the functions of money added on top of it - and, indeed, many systems that are being made to function like money are built on top of transit (Oyster, Octopus). And it goes back further. Is money itself always a mashup? The cowrie shells used as currency in the Atlantic slave trade served as ballast on slave ships and as jewelry and adornment in West Africa and India. Put ship transport together with a lucrative traffic in persons together with an object that has several different functions put into it based on its material characteristics, and you had fertile ground for the invention of a new currency. In what ways are emerging systems like M-PESA or the use of airtime minutes as currency a kind of mashup or mod? We might want to reflect on 1) existing money mashups and mods being developed “in the wild” out there in the world; 2) designs for new mashups, creatively and consciously produced; 3) and how the latter inevitably get re-made by their users along the way…

David Birch 24/12/2008 04:47:29

I’m not sure about the idea of applying mashup to physical objects such as shells, because the key to mashup culture is that the information that is being mashed up is still there and used for its original purpose whereas the derivative has created entirely new value. The cowrie shells had no other purpose, if you see what I mean.

Bill Maurer 24/12/2008 10:27:45

Good point. It would be good for me to better understand how and when it makes sense analytically to distinguish mash up from mod from re-purposing… But: just to stick with cowries - the Portuguese who helped inaugurate the cowrie as the currency of the slave trade adopted it in part because it could serve two functions alternately in time during the process of trade: first as ballast, then as currency, and then back again to ballast. Hogendorn and Johnson: “They [the Portuguese] knew the shells could be used for ballast, and thus would compete for space not with normal revenue-earning cargo but only with other items that could give stability to their merchantmen on the long passage home around the Cape of Good Hope. Stones, sand, and ‘any old iron’ all fully adequate as ballast, would produce little or no revenue, but cowries could” (Shell Money of the Slave Trade, p.30). I guess this comes under the category of “re-purposing” then - not mashup per se. But mashup might work as a descriptive category for things like airtime minutes, no?

What I am trying to capture, more broadly, is the whole domain of practices involving money and non-money objects and information that involves putting things to new uses or adding or subtracting functionality to those things. This often takes place without (or despite!) the intent of those designing those things in the first place: Unintended consequences of design that allow an object to to repurposed as money (or that allow a money object to be repurposed as non-money, at least sometimes and in some contexts of use). Some of the Royal College of Art projects explore this aspect of possible future moneys.

Leave a Reply

You must be logged in to post a comment.