The Gentrification of Payments

A slow-moving phenomenon is unfolding all over the world. It will have serious consequences, but very few people are consciously aware of it, perhaps because it involves something seemingly banal and benign: the spread of digital payments. This phenomenon is not only occurring in the major cities of economically advanced nations, but also in poorer countries, often promoted via the “financial inclusion” programs of international development organizations in partnership with major financial institutions.

The rise of digital payment (sometimes going under names like “e-money”, “plastic money” or “mobile money”), and the associated phasing out of physical cash, gives financial institutions and governments a new means of financial monitoring and control on an unprecedented scale. As I will argue, this can be seen as the gentrification of payments.

The term “gentrification” usually refers to the neighborhood process in which a marginalized community — often characterized by informal economic networks, street markets and a rough edgy vibe — finds their environment gradually diluted by the influx of wealthier newcomers who price them out and use their community as the setting for new formal markets.

Gentrification of neighborhoods that prices out residents can be compared to the drive for digital payments over cash.
Gentrification of neighborhoods that prices out residents can be compared to the drive for digital payments over cash.

The process sets in motion a “cleansing” of informality, in which the newcomers, who are attracted to certain desirable appearances of the community (such as the music or the fun atmosphere), eliminate the threatening elements that accompany the original precarity (the gangs, the drug dealers, the rough markets).

A process of neighborhood gentrification culminates with a hollowing out of the original community, the neutralization of the risk that it represents to wealthier people, and the rise of an nonthreatening simulacrum of that community backed by elite…

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