Technology is creating new ways to pay. Are we ready?

E D I T I O N 4 • F E B R U A R Y 2015 • V O L . 1 • N O. 2
Made possible by
the PwC Charitable
Foundation
®
v 10/9/03
FINANCIAL LITERACY FOR KIDS
Technology is
creating new
ways to pay.
Are we ready?
timeforkids.com
Is new technology safer and smarter than cash?
What Is Bitcoin?
What do you call money you can’t see,
touch, or deposit in a bank? It sounds
like the start of a joke. But it’s bitcoin. The
digital currency was developed in 2009.
Bictoins are not made by the government.
Instead, they are traded between people. You
can also use them to buy things, but only at a
few websites and stores.
Time for Change
MONTGOMERY MARTIN—ALAMY
We need to change because the ways we pay today
aren’t perfect. Cash gets worn out and has to be
replaced. This costs nearly $1 billion a year. Checks
are inconvenient, and mailing them costs money.
Credit and debit card numbers can be stolen.
New technology aims to fix these problems.
One example, Venmo, is an app that lets family and
friends send money. Parents can send kids’ allowance
money using Venmo. Another app, Square, lets users
swipe a credit card on a mobile phone or tablet just
like they would at a store. Both Square and Venmo
then work with banks to make the payments.
A New Way to Pay
A woman uses her cell phone
to pay for her purchase.
Imagine you are about to buy a video game in a
store. You go to the register and hold out your hand.
But it’s not cash you’re offering—it’s your palm.
You hold it over a sensor that scans your veins. This
identifies you and completes the purchase.
We Pay for Things
2
An engineer in Sweden is working on this
technology. It probably won’t be used in your
favorite stores next year. But other new ways to
pay will be used. That’s because how we pay for
things is constantly changing.
CATTLE The first type
of moo-lah was cattle.
People paid for goods
with sheep, camels, and
other livestock, too. Later, grains and
vegetables were also used to barter .
COWRIE SHELLS
Cowrie shells, the
shells of a mollusk, were the most
widely and longest-used currency
in the world. China was the first
country to use them as money.
COINS Silver, bronze,
and gold coins first
appeared in Turkey
and were common in
the Greek, Persian, Macedonian,
and Roman empires.
9000–6000 B.C.
1200 B.C.
500 B.C.
Mobile money lets users pay with phones or
mobile devices. Apple Pay is one form of mobile
money. It saves credit- and debit-card information
on the phone. Then, users can pay in stores by
waving the phone near a sensor or scanner.
POWER WORDS
barter: to pay by exchanging
products or services instead of
money
currency: something that is
used as money
Very few bitcoins exist compared
to other forms of money. That
makes them valuable. Right now,
one bitcoin costs about $340. But
because they are not commonly
used, bitcoins are risky. In 2013, one
bitcoin cost more than $1,000, but if people lose
interest their value could drop to almost nothing.
Which kind of currency would you rather
have, bitcoin or paper money?
Mobile money is convenient. It provides more
security than credit and debit cards. It talks to the
bank using codes that can’t be stolen. Apple Pay
also uses fingerprints to keep information safe.
One day we won’t even need a smartphone to
pay. That’s where ideas like scanning a hand come
in. Engineers in the Netherlands have created a
payment method called Eaze. It lets a buyer pay
by nodding while wearing Google Glass, hightech eyeglasses.
You may one day be able to pay simply by
blinking. The possibilities for paying are limited
only by how much money you have in your bank
account. –By Arielle O’Shea
Pay
a
FAMILY
CHALLENGE
New Way
Pay for something in a way you never have
before. Kids, talk to your parents about trying
something different. Parents, let your kids
watch you buy something online or use a
debit card. Talk about your choices. Why do
you usually pay one way? Are you willing to
try new technology?
PAPER MONEY China
first used paper money,
or bank notes. Europe
started thousands of
years later. Shortly after that, paper
money came to the U.S.
CREDIT CARDS
America’s first bank
card, named Charg-It,
was introduced by John
Biggins, a banker in Brooklyn,
New York.
ELECTRONIC
MONEY Digital
payments using
mobile wallets and
digital currency, like bitcoin,
are on the rise.
806 A.D.
1946
Today and Tomorrow
from left: getty images; BRAD WILSON—GETTY IMAGES; DEAGOSTINI/GETTY IMAGES; GETTY IMAGES; WALKER AND WALKER—GETTY IMAGES; BURAZIN—GETTY IMAGES; CHRIS RATCLIFFE—BLOOMBERG/GETTY IMAGES
February 2015
cover: matt collins for time for kids
THOMAS TRUTSCHEL—PHOTOTHEK/GETTY IMAGES
The
Story
Of
3
Should paper money be phased
out by 2020?
KIDS WEIGH IN
STEVE HIX—SOMOS IMAGES/CORBIS
Is paper money a thing of the
past? We are all used to using
bills and coins. But some
shoppers and store owners
think money is nothing but a
nuisance. Should our society
say so long to cash? Here, two
TIME For Kids Kid Reporters
give their opinions.
YE S ! N O !
Dahlia Suiter, 13
Liam Kivirist, 12
Chula Vista, California
Browntown, Wisconsin
The U.S. spends millions
Without paper money,
of dollars a year printing
everyone would have to
money. These days, we
pay using technology. It
also shop online and use
would cost money and
credit cards. But these
take time for all stores
ways to pay can be hard
to make this possible.
to keep safe. More secure
Not all businesses or
ways are available and get shoppers could afford the
better each year. These
technology. Plus, shoppers
new uses of technology
would have no privacy.
are more efficient. And
People could look at
they don’t cost the U.S.
every bill they paid and
Treasury a cent.
purchase they made.
We want to hear from you! The next topic: Is it wise to skip college and go directly into the workforce?
E-mail your opinion to [email protected]. For more information, go to timeforkids.com/pwcdebate.
ASK JEAN
THE ECONOMICS BEHIND
Jean Chatzky is a money expert.
Dogs are adorable.
But owning
one can be
expensive.
First, you
pay to buy
or adopt
your pet. Then,
according to the
ASPCA, you pay
this much each
year to own a
medium​-size
dog:
4
How can you save money while still
buying the things you want?
—Noa Polish, 11, Evanston, Illinois
Food
Toys and treats
Health insurance
Medical care
Pet license
Total cost
$120
$55
$225
$235
$15
$650
There are two tricks.
One is to save before
you spend. The next
time you get money, try
saving some. Let’s say
you get $5 a week. Put
$1.25 or $2.50 in your
piggy bank. Now that
you know your savings
are taken care of, you
can do what you want
with the rest. You could
spend it or give it to
charity. The second
trick is to make saving
a habit. You’ll feel
inspired when you see
money add up in your
piggy bank.
Saving is something
most adults have trouble
with. Learning it young
will help you during the
rest of your life.
COURTESY JEAN CHATZKY
GETTY IMAGES
Owning a Dog
Do you have a question? Write to Jean at
[email protected].
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