COVID-19 – Stimulus towards Innovation?

Apr 29, 2020 by

Tom Watkins

Is America  ready to safely escape the four walls of our home and get back to enjoying the world as it used to be? We all know that what we once had is now gone. And with our new normal, what we make our world is up to all of us to define going forward. 

Even as we re-examine and disinfect our lives as a result of this pandemic, one area that needs consideration is that cash: it may not be king in a post COVID-19 world. COVID- 19 has shone a light on the many areas of our culture that society have long neglected. 

As we seek ways to keep ourselves safe from this virus, our mission is to find ways to create contactless payment systems rather than coins and paper money. The U.S. is playing catchup with many other regions of world when it comes to making contactless payments. A deadly virus has accelerated our behaviors as a society. 

Hopefully, the virus has raised everyone’s consciousness about germs. Our awareness has been raised about proper coughing or sneezing into a sleeve or elbow, social distancing, and hand washing to help control the spread of this and future diseases. 

Public health officials inform us that COVID-19 spreads through droplets released into the air when someone coughs or sneezes. Yet it can also be contracted through the surfaces that we encounter, including money. Germs can remain on surfaces for hours if not days on surfaces like cash and fabric. While is believed that the chance of being infected by cash is still low, there remains a psychological fear of touching money that has passed through multiple people’s hands before it finds its way to you.  

America, the innovation capital of the world and the world’s biggest economy, is moving at a snail’s pace for going cashless. We are barely at the starting line and we need to catch on to the trend.

COVID-19 may be just the stimulus we need to move forward.

In China, you do not see people signing receipts, inserting credit or debit cards, entering PIN numbers on keypads. Contactless payment is ubiquitous.

We have become aware that few businesses want our cash today and prefer the non-touch approach of taking a credit card over the phone as a preferred method of payment. People rightfully fear using the old “greenbacks” out of fear that paper and coin currency, touched by tens of thousands of unknown people over the course of its useful life, could be a petrie dish for spreading the flu or coronavirus. 

Change: Evolutionary or revolutionary?

I have been traveling in China for more than 30 years. On my first trip to China in 1989 it was then illegal for foreigners to have the “People’s money”. Chinese currency, the RMB, was restricted to use only by Chinese. China had a two-tier currency system with foreigners having to buy Foreign Exchange Certificates (FECs). It was forbidden for non-Chinese to possess RMB, designed to restrict the movement of foreigners within China. For foreign visitors in China this meant they were restricted to where we could stay and where we could shop. This system was in place until 1994. 

China is the future. At a time when it seems that anything China is viewed with skepticism and trepidation, America needs to catch up with them in living a currency-free, technology-driven world. 

I can recall the time when there were no private phone lines in Chinese homes. Since then, China completely skipped landline technology in favor of cell phones. Today cell phones are ubiquitous, even in the most rural Chinese villages. Wireless Internet coverage in China is far better than many places in Northern Michigan and the UP. Your cell phone is your wallet in China today. 

Today the use of technology by average Chinese citizens – young and old – far surpasses what we see in America. The WeChat app, the brainchild of Tencent, a giant China tech company, is often referred to as a social media app, equivalent to Facebook or WhatsApp. But this is to grossly undersell the power of WeChat with its more than 1 billion active users.

WeChat is both lifestyle and social ecosystem with seemingly endless applications. Beyond the typical social media functions of messaging and Twitter-style feeds, it is also used for financial transactions of almost any type. It has virtually replaced cash in most commerce exchanges. 

I have even seen beggars in China with a QR code hanging around their necks so that who wish to make a donation can send a monetary contribution via WeChat.  

WeChat is also a translator, a phone system, geographical locator and more. It is the new business card: Business associates and strangers alike share their contact info electronically. To say it went from being unheard of to becoming a nearly universally-used, overnight sensation is an understatement. It is truly ubiquitous to the point where vendors look puzzled when you attempt to use RMB (Chinese currency): in fact, there are places that do not accept cash, only electronic payment.

China is not standing still. Transactions have been moved from cash to electronic mobile phone- assisted and even to a new way to pay in China. No card, no phone, just look at the camera and facial recognition payment. The future has arrived in China.

The agony that this global viral pandemic has caused promises to be long lasting. How can we use this shared pain to push us forward in cultural areas and to heal social inequities that have been exposed? Areas such as cashless payment systems, universal 

healthcare, and education reform that embraces technology and distance learning. Not to mention livable wages and decent health care benefits for “essential workers” that we have long ignored pre-pandemic and are now praising today. 

Change can produce progress. COVID-19 should do more than make us sick or kill us. It might provide just that catalyst needed to improve society and move humanity forward. 

Tom Watkins served the citizens of Michigan as state mental health director and state superintendent of schools. He also was the president and CEO of the Economic Council of Palm Beach County, FL. He is considered and “expert” on China and has been working on building cultural, educational and economic ties between our two nations for over 3 decades. Read more here: https://www.chinausfocus.com/author/84/tom-watkins.html

Print Friendly, PDF & Email

1 Comment

  1. Frank lee

    Excellent article.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.