Reading 0 Work in pairs. Discuss what the cartoon ic about. Match the words in C with the definitions. 1 when a business or a person has no money 2 moncy you give to pay for something 3. the money a business takes and spends to keep operating 4 to buy something 5. the process of buying something ® Read the passage and complete the sentences with a - i. 1 Credit cuds awe bewet 2. Smart cards in Hong Kong 3 Inthe US the use of cheques is falling 4 The main advantage of smart cards is 5 Consumer spending rose because cash machines were inuvduced. the ability to store information. for payments between countries. people prefer to use direct debit, can be used for tickets and fast food. thar they are able to replace cash. people could take out money 24 hours a day. for small and large amounts. because banks atc ul mora me ao ce peuple more w use dieu. Do the statements agree with the information given in the Reading Passage? Write ... TRUE if the statement is true according to the passage. FALSE if the statement is false according to the passage. NOT GIVEN if the statement is not given in the passage. 1 Banks today still have the same structures as five hundsed years ago. 2. North America has become a society that does not use cash. “Tax rates could be lowered as a result of a reduction in crime. Smart cards can carry computer programs. In the 1980s people became more responsible with money. 3 4 5 @ Read the passage again and find words which mean ... 1 2 3 4 to put equipment in a place where it is ready for use (paragraph C) very important and long-term (paragraph D) relating to the hasic characteri of something (paragraph D) a system in a country or organisation that carries goods or information (paragraph F) 5 something that advertises a special product or event. (paragraph E) 22 Unit 2; MuneyTHE CASHLESS SOCIETY Ifa banker from fourteenth century Italy used a bank today, he would probably stil be able to recognise ‘the banking system. Zist century banking is still more a product of the past than the present and ‘customers are becoming impatient. Payments made through banks can stil take three or four days to clear and cross-border payments can cost up to 2% of the amount sent. Credit cards are a little better as an '5 easy means of payment especially acrass borders, but for merchants and consumers they are expensive both for very small payments and for very large ones. The pressure for banks to change is certainly here. In the future, whispering into your wristwatch or waving your mobile phone could be enough to start a ‘transaction — from paying a newsagent, downloading digital music, buying a train ticket, sending cash to a relative or trading shares. In Finland you can already pay fora car using your mobile. In Japan 650,000 410 electronic purses known as Edy cards are in circulation and can be used at around 2, 1UU stores in the Tokyo area. In Hong Kong, you can walk through ticket barriers and buy fast food with your Octopus stored-value (smart) card, In Hong Kong there are about 8.6 million of these cards in circulation with more than 95% of citizens using the cards, making Hong Kong the world leader in e-cash ‘The US too is much closer to becoming a cashless society than many people realise. Credit and debit card 15 purchases in the US make up most of all retail transactions. Card scanners are installed in parking meters, fast-food restaurants and unstaffed petrol stations. The use of cheques is declining as banks charge higher fees for using them, in an effort to encourage consumers to use debit cards and direct debit bill payment. The percentage of consumer purchases made with cash or cheques has fallen trom 80% in 1994 0 66% recently. There are already 6.2 milion smart cards in North America and this is predicted to rise to 20 nearly 40 million by 2007. The immediate effects of a cash-free society could be profound and fundamental. Theft of cash would become impossible ~ bank robberies could not happen. Attacks on shopkeepers, taxr-dnivers and cashiers would end, the streets would be safer, security and insurance costs would fall. Unpaid taxes could be collected, and as a result tax rates could be lowered. The real advantage of smart cards however is not 2 the ability to replace cash, but the information they can hold in addition to this. They can store data, making them ideal to use as security passes to office buildings or 1D cards, They can store medical information so that in an emergency a hospital would have all the information they need about you. Scientists are even proposing computer chips the size of a grain of rice placed under the skin to carry this information. Given these benefits, why is the cashless society a lot further away than many people have ‘30 predicted? The problem is not a technological one — the technology to replace cash exists today. There are several reasons why the cashless society has not yet arived, Firstly the economic infrastructure for debit and credit cards is already in place, making it difficult for e-cash cards to enter the market Secondly, the cost of introducing these smart cards is estimated at $15 billion worldwide and what is more, the consumer is not necessarily looking fr a new way to pay. Furthermore, making society cash- 45 free has other consequences. Starting from the early 1980s, consumer spending rose with the introduction of cash machines which allowed consumers to withdraw cash around the clock. Secondly, personal bankruptcies rose dramatically as people had easier access to credit: people's cash flow became invisible and people became irresponsible with their money. Thirdly, in France smart card fraud rates were very high. Lastly, companies will be able to follow the consumer's spending patterns, analyse this and target 40 them for sales promotions. Although every month brings closer the dream of a cashless socielv, no new scheme has found the best way forward yet. Unit 2: Money