8/11/2014

Why your new bank will be Starbucks or Nike - CNN.com

You've selected the International Edition. Would you like to make this your default edition?
EDITION: INTERNATIONAL
TV:

CNNi

U.S.

MXICO

Yes | No

ARABIC

Close

Sign up

Log in

CNN en Espaol

Set edition preference

Home

Video

World

U.S.

Africa

Asia

Europe

Latin America

Middle East

Business

Entertainment

World Sport

Tech

Travel

iReport

Part of complete cov erage on

Future Finance

Why your new bank will be Starbucks or

Nike
By Paul Kemp-Robertson, Contagious Communications, Special to CNN
August 5, 2014 -- Updated 1057 GMT (1857 HKT)

SHARE THIS
Print
Em ail
More sharing
Recom m end

710

Your sweat as a currency?

STORY HIGHLIGHTS
The definition of money is
starting to change, says Paul
Kemp-Robertson
He believes brands w ill have
their ow n shadow economies,
endorsed by consumers
'Is there a reason for traditional
institutions to be in charge of
money anymore?' he asks

Editor's note: Paul Kemp-Robertson is co-founder and editorial

director of marketing innovation consultancy Contagious
Communications. He has written for publications including Business
2.0 and The Guardian, and his talk on alternative currencies has
been viewed more than 837,000 times at TED.com. The opinions
expressed in this article are solely his.
London (CNN) -- I work in marketing. I don't claim to be an
economist or a financial expert, but from my observation of
consumer behavior I can see that people's definition of money is
starting to change and fragment.
The disruptive effect of digital and mobile technology lies at the
heart of this, as well as a general decline in the levels of trust being
placed in traditional institutions. Annual surveys like the Edelman
Trust Barometer suggest that the world shows greater faith in peers
and corporations than governments and central banks. This
decentralization of trust explains the rise of peer-to-peer
consumption models such as Airbnb and Zipcar, as well as the
growth of alternative, synthetic currencies such as Bitcoin, which are
fast, anonymous and borderless.

For me, the

greatest
contributor to
new forms of
money is going
to be brands.
Paul Kemp-Robertson, Contagious
Communications

But, for me, the greatest contributor to new forms of

money is going to be brands. Yes, you heard right. In the
very near future, brands like Amazon, Nike and Starbucks
are likely to be running shadow economies in some form
or other.
Nike recently set up vending machines exclusively
available to active users of their wearable fitness monitor,
the Nike Fuelband. Purchases could only be made by
redeeming points generated via physical activity.

Part of complete cov erage on

Future Finance
Cyberattacks: the threat from inside
July 16, 2014 -- Updated 1634 GMT (0034 HKT)

With cyberattacks on the rise,

a modern-day challenge for
financial institutions,
businesses and people is to
get smarter about prevention.

Winston Churchill on a 5 plastic note

July 9, 2014 -- Updated 1655 GMT (0055 HKT)

As the UK w ill soon sw itch

some of its bills to plastic bank
notes, find out w hy they are
follow ing Canada and
Australia's lead.

Is a cashless society on the cards?

July 9, 2014 -- Updated 1655 GMT (0055 HKT)

At Starbucks cafes in the United States more than 30% of

http://edition.cnn.com/2014/08/05/opinion/starbucks-nike-currency/index.html?eref=mobiles_republic

1/7

8/11/2014

Why your new bank will be Starbucks or Nike - CNN.com

The ease of contactless cards
and mobile payments has led to
a rise in cashless payments.
But are w e nearing a cashless
society?

transactions are made with "Stars" -- the reward points accrued

against purchases over time, and stored on a Starbucks Card. In
other words, one in three interactions at the till don't involve
traditional cash.

Paul Kemp-Robertson

It's not hard to imagine Stars becoming a currency option

inside the countries in which Starbucks operates. The
same applies to Amazon. The online retailer recently
launched Amazon Coins. Admittedly, this was initially
designed to make app purchases on the Kindle platform,
but many economic commentators have noted that the
company -- whose global revenues of $74.4 billion are
more than the GDP of many countries -- has the scale
and power to turn its online market into a virtual payment
system by creating a shadow economy.

How to print your own money

August 1, 2014 -- Updated 0953 GMT (1753 HKT)

People across the w orld are

using homegrow n currencies
to boost local economies -- and
you can too.

Would you bank with Starbucks?

August 5, 2014 -- Updated 1057 GMT (1857 HKT)

In the near future, big brands

could be running alternative
forms of currency -- shadow
economies endorsed by the
consumer.

Read: How to create your own money

Turning back time = good for business?

To those who think this sounds far-fetched and fanciful, I

would argue that it is simply a case of history repeating
itself. In the United States 1860, there were 8,000
different kinds of banknotes in circulation, issued by
1,600 corporations. The government was responsible for
a mere 4% of the money supply. The catalyst that
reversed this scenario was the outbreak of the Civil War,
after which the leaders in Washington demanded more
control.

Cashless in Hong Kong

July 9, 2014 -- Updated 1647 GMT (0047 HKT)

Find out w hy Hong Kong

residents don't w aste time
foraging for change -- for
transport, shopping, groceries
and coffee.

Is your business a crowd pleaser?

Businesses braced for cyber attack battle

Boiled down to its core essence, money is simply an

expression of an agreed value. With digital and mobile
technology it is now possible to quantify value in multiple
ways, which in turn makes it easier to create new, valid
forms of currency. In today's hyper-connected, datadriven age, it's reasonable to assume that brands are
likely to create synthetic, shadow economies -- entirely
endorsed by the consumers who choose to trust and
engage with them -- in exchange for useful rewards,
information, services and lifestyle tools.

July 9, 2014 -- Updated 1654 GMT (0054 HKT)

Find out w hy how

crow dfunding w ill have a place
in how businesses are funded
in the future.

Bitcoin your way to a double espresso

July 9, 2014 -- Updated 1653 GMT (0053 HKT)

Find out more about the UK's

first Bitcoin ATM machine,
w hich arrived in a trendy
London cafe earlier this year.

Explainer: How do cryptocurrencies w ork?

The digitally native younger generation is likely to lead

this march into alternative currencies. Edward
Castronova, a professor of telecommunications at Indiana University
Bloomington notes that among Millennials, the mental accounting on
different sorts of "money" is already very fuzzy. He suggests that 20year-olds don't see any difference at all between dollars, gold coins
in videogames and academic GPAs: "They're all just digital score
sheets."
This shift in perception is backed up by some research that my
company, Contagious, conducted last year with the polling company
Opinium. We found that 36% of 25 to 34-year-olds in the United
States would find it more useful to receive change in the form of
mobile credit than the equivalent value in dollars and coins. And if
people are starting to interrogate what money means, is there a
reason for traditional institutions to be in charge of money anymore?

If people are
starting to
interrogate what
money means, is
there a reason for
traditional
institutions to be
in charge of
money anymore?
Paul Kemp-Robertson

The idea of corporations minting their own currencies in

the future already seems to have gained some level of
acceptance. In the same Contagious survey, 19% of
people in the United Kingdom and 27% of people in the
United States say they would be happy to use a currency
issued by a private entity or brand. Tellingly, that figure
rises to 45% amongst 24 to 35-year-olds in the United
States -- and 36% of that demographic agree that they
would be comfortable if sovereign currencies were
replaced altogether. That's a significant proportion of
consumers, which explains why brands are starting to
muscle in on money.

The crucial factor in this behavioral shift is loyalty, which

has now become a micro-economy in itself. The system
of coupons and reward schemes has been around for
decades (think Green Shield Stamps or Air Miles). But what's
radically changed the loyalty game is the smartphone. An article in
the Harvard Business Review last year pointed out that loyalty
schemes are evolving into economic ecosystems of significant value

http://edition.cnn.com/2014/08/05/opinion/starbucks-nike-currency/index.html?eref=mobiles_republic

How do cryptocurrencies work?

July 9, 2014 -- Updated 1128 GMT (1928 HKT)

Cryptocurrencies are digital

money -- and they're on the
rise. Fnd out w hy digital money
is part of the future of finance.

Most Popular
Today's five m ost popular stories

Opinion: How the military coup saved Thailand's

top holiday island of Phuket from ruin
Ukraine: Rebel leader resigns; militants shoot
down fighter plane
Prince William goes back to work
Friendliest/unfriendliest U.S. cities, according to
Conde Nast Traveler
Why Vladimir Putin isn't going to make peace

More from CNN Video

What is this mysterious animal?

Christian leader: ISIS beheading

children

Cosmetics heiress builds

2/7

8/11/2014

Why your new bank will be Starbucks or Nike - CNN.com

-- partly thanks to mobile technology bringing the mechanics of
payment and loyalty together.

lifestyle brand

The article states: "Retailers will need to think like bankers who mint
their own currencies. Market leaders will be those who best help
consumers manage and spend Branded Currency from their
portfolios, offer the best exchange rates, create the most liquidity,
and make the most efficient markets."

ISIS brutality caught on video

But no jokes about detergent brands laundering money, OK? That

just wouldn't wash.

More from CNN

Eat this fish and do the planet a
favor

Is organic food better for you?

Read: How to create your own money

Read: Bitcoin your way to a double espresso

An isolated Russia's best friend

Read: Cyberattacks -- Why you're the weakest link

The opinions expressed in this commentary are solely those of Paul Kemp-Robertson.

SHARE THIS

39

Qualcomm Invests $150 Million in

Chinese Startups

Print

710

Em ail

Com m ents

More sharing

Recom m end

From around the web

(Prom oted - Electronics

Purchasing Strategies)

Obamas Snack Comments

Upstage White House Nutrition
Dinner

We recommend

(Prom oted - Roll Call)

Recommended by

Rescuers pull stranded

passengers from Six

Noted male model now a

woman

Flags roller coaster

The spaceship
reinvented for new

Oren: Hamas media

strategy relies on deaths

frontiers

of civilians

From around the web

Sponsored links
SuperMom Bazaar Aug 2014
Save Up to 80% on 8000+ Baby Goods Biggest
Baby Fair in SG.
supermombazaar.com/BabyFair

Rising Technology

Microsoft to Cut 18,000

10 Facts about

Renewable Fracking?

Trends for 2014 and

Beyond

Jobs

Horseshoe Crabs

(Prom oted - Roll Call)

(Prom oted - Electronics

Purchasing Strategies)

(Prom oted - Panam a Jack)

(Prom oted - Peak 10)

Recommended by

Sponsored links
SuperMom Bazaar Aug 2014

Save Up to 80% on 8000+ Baby Goods

Biggest Baby Fair in SG.
supermombazaar.com/BabyFair

39 Comments

CNN

Sort by Best

Login
Share

Favorite

Join the discussion

2 IT too

6 days ago

STALE beans.
OVER--priced, mediocre coffee.
BIOSPHERE degrading plastics.
NO table service.
----------------------------------------- = TOTAL RIPOFF!
http://edition.cnn.com/2014/08/05/opinion/starbucks-nike-currency/index.html?eref=mobiles_republic

3/7

8/11/2014

Why your new bank will be Starbucks or Nike - CNN.com

KEEP building, and thronging, those franchise slums!

13

Reply Share

a human

2 IT too 5 days ago

Worst coffee on earth.

3

Reply Share

Paid Commenter

2 IT too a day ago

Wow the very first comment is from a troll. FYI sbux doesn't have a franchise
model.
Reply Share

Niko

Paid Commenter 6 hours ago

That's not even a problem. The problem is quality of the coffee they
are selling for a premium price to wanna be losers.
Reply Share

roadmouth

5 days ago

A poorly thought-out and written article. The entire premise is based on a crucial line
in paragraph 3. " Annual surveys like the Edelman Trust Barometer suggest that the
world shows greater faith in peers and corporations than governments and central
banks. " But people don't bank with governments or central banks. They bank with,
how do you say in English, BANKS! So, why no mention of the reason people don't
trust their banks? Because nearly every other survey indicates that people trust their
bank and credit unions vastly more with their financial data than brands such as
Starbucks and the government.
I'd suggest CNN look at any article covering finance, and eliminate all those
beginning with the caveat, " I don't claim to be an economist or a financial expert".
Might be a good heads up that that person is just talking smack and promoting his
own company - which is mentioned 3 times.
8

Reply Share

whatthebleep

6 days ago

Uhh... You mean the corporations are not running "shadow economies" now. In
actuality, governments may be people's last hope against the corporations, despite
the heavy amount of bribery that occurs behind the scenes today in making national
policies.
6

Reply Share

jackandjill

whatthebleep 5 days ago

Unfortunately, that may not be the case. There is already unholy and
inseparable cooperation between those entities. Govt is using corporations
when it comes to violating privacy of citizens etc. And Corporations are using
Govt entities heavily for lobbying etc. Breaking that cooperation is impossible,
specially given the incentives for both sides.
1
funk

Reply Share

6 days ago

Really? You guys are living in a dream fantacy world...Your next bank will be yours!
YOU WILL BE THE BANK! Decentralized cryptographic open source blockchain
technology digital currency is the most free-market system ever! Everything else is
false! BITCOIN = INDEPENDENCE and FREEDOM!
5

Reply Share

Marilena Fenn

5 days ago

Starbucks is NOT my "bank" nor will it ever be. Rude people, bad customer service,
dried up food, rotten bananas, poor customer service. NOT my bank, pal.
4
10/6

Reply Share

6 days ago

Hey, Paul..., you must have written this article while vacationing in Colorado, didn't
you? Smoke a little too much of the ganja, did we???
4

Reply Share

I Equals You

6 days ago

Stand in line to have exorbitantly priced bad tasting coffee with strange Italian names.
I don't understand how Starbucks has been successful this long.
3

Reply Share

http://edition.cnn.com/2014/08/05/opinion/starbucks-nike-currency/index.html?eref=mobiles_republic

4/7

8/11/2014

Why your new bank will be Starbucks or Nike - CNN.com

3

Reply Share

knownquantity

6 days ago

So, basically, it was a complete failure in the 19th century, but it's supposed to be a
great idea now?
3

Reply Share

Anonymous_Joe

5 days ago

Why Starbucks will likely be my next bank? I figured because I would need to take
out a loan to buy a cup of coffee.
2
Ice

Reply Share

5 days ago

This is a dangerous idea. Why do people think it's necessarily good to have these
currency options that are outside government control? Hello, regulations? Recipe for
disaster if on a large scale. Very naive.
2

Reply Share

mrelon

6 days ago

Won't be mine..and i don't get their coffee either..

2
Erlo

Reply Share

6 days ago

There needs to be an underlying currency that everyone agrees on. Nike can try and
make it's currency all it wants, but no one is going to accept Nike cash for a burger. It
just won't happen.
2

Reply Share

kai121

a day ago

Starbucks, best tax evaders on earth. Apart from Google, of course.

1
10/6

Reply Share

2 days ago

Nope, especially after finding out that they support Israel.

1
Niko

Reply Share

6 hours ago

I used to like starbucks until I realized I am drinking only sugar and their coffee
sucks! And they are overpriced. And they are not environmentally friendly. So yea..I
stopped drinking starbucks.
Reply Share

Sean Mccoy

13 hours ago

nothing is better then wawa

Reply Share

Cinnamon Hearts

a day ago

I like McDonald's coffee. Never been to starbucks.

Reply Share

Matt Wesselhoff

4 days ago

Paul, how can in one in three drinks at Starbucks be freebies they're giving away?
Can't be right.
Reply Share

Sam

Matt Wesselhoff 2 days ago

I personally hate Starbucks. But I was in there once while visiting a friend in
Boston. He needed internet and we went into a starbucks, didn't buy anything
and used the internet for about an hour and a half before the employee came
up to us with a large coffee and said, "We noticed you guys sitting here for a
while with nothing to drink, so here's a free one". I was quite surprised.
1

Reply Share

kshoosh86

Matt Wesselhoff 3 days ago

My thought exactly. I do frequent Starbucks (besides having worked there a

few years ago), and you get a free drink after you make 15 purchases. It's not
a lot, but since I go there anyway, I use the card to get a freebie that I wouldn't
normally get. I don't know how that system translates to a third of drinks
being free.
http://edition.cnn.com/2014/08/05/opinion/starbucks-nike-currency/index.html?eref=mobiles_republic

5/7

8/11/2014

Why your new bank will be Starbucks or Nike - CNN.com

[edit: nor, for that matter, how Starbucks is staying in business if 30% of
sales are free.]
Reply Share

Andrew

kshoosh86 2 days ago

They have actually changed the program some, and its a free drink
after 12 purchases/stars now, but your point stands. I have no idea
how that translates to 30% of their transactions being done with stars.
Reply Share

KoreaEastSea

5 days ago

Starbucks is doing very well in Korea..........

Reply Share

GotchaGlobal

KoreaEastSea 4 days ago

I suspect because the moniker that is the Starbucks logo is now viewed as a
status symbol, if only nominally. Sadly, human gullibility and drive for preening
amongst fellow humans remains ubiquitous across the nearly 200 nation
states of the world. Surely most of us are guilty of being label slaves, or so
the leading merchandisers and their marketeers certainly continue to hope.
1

Reply Share

Victor McCaliph

6 days ago

Gersdd
Reply Share

Koreansdisqus

6 days ago

Starbucks Coffee, is only American company doing well in Korea. Koreans drink
more coffee then any fast food business in Korea........ Koreans love coffee,
Starbucks blends well in Korea Society.......
Reply Share

Slippery Bly International Spy

Koreansdisqus 5 days ago

Radical cosmetic surgery also "blends well in Korean Society..."

1

Reply Share

KoreaEastSea

Slippery Bly International Spy 5 days ago

Like you have tried it..........

Reply Share

Slippery Bly International Spy

5 days ago

KoreaEastSea

Lol V-line
Reply Share

KoreaEastSea

Slippery Bly International Spy 5 days ago

You have V-line, your laughing at yourself LMAO.....

Reply Share

Slippery Bly International Spy

5 days ago

KoreaEastSea

Not myself but at all those Korean women getting it !

Reply Share

WTFuKKK

Slippery Bly International Spy 5 days ago

Why would someone not like V-line?? are you homosexual?

Reply Share

Slippery Bly International Spy

WTFuKKK 5 days ago

Whatever you say, boxer

Reply Share

Sarebolth

Koreansdisqus 6 days ago

Of course! Just look at the shape of the logo and the same shape on the S
Korean flag!
Reply Share

Koreansdisqus

Sarebolth 5 days ago

That was Pepsi ( old logo) not Starbucks.... Starbucks is doing very
well in Korea because Koreans admit Starbucks has best coffee in
http://edition.cnn.com/2014/08/05/opinion/starbucks-nike-currency/index.html?eref=mobiles_republic

6/7

8/11/2014

Why your new bank will be Starbucks or Nike - CNN.com

well in Korea because Koreans admit Starbucks has best coffee in
the house!!!!
Reply Share

Niko

Koreansdisqus 6 hours ago

Sturbucks has the best coffee? Have you ever tried real
coffee? Come to Europe, we'll show you real coffee (hint: it is
not drank by gallons or huge Styrofoam cups). Starbucks is
for bourgeoisie (people with no taste).
Reply Share

Subscribe

Add Disqus to your site

66

HI 69 LO 55
London, United Kingdom Weather forecast

Home | Video | World | U.S. | Africa | Asia | Europe | Latin America | Middle East | Business | World Sport | Entertainment | Tech | Travel | iReport
Tools & Widgets | RSS | Podcasts | Blogs | CNN Mobile | My Profile | E-mail Alerts | CNN Shop | Site map | CNN Partner Hotels

2014 Cable News Network. Turner Broadcasting System, Inc. All Rights Reserved.
Terms of service | Privacy guidelines | Ad choices

| Advertise with us | License our content | About us | Contact us | Work for us | Help

CNN en ESPAOL | CNN Chile | CNN Mxico | | | Trke

CNN TV | HLN | Transcripts

Why your new bank

will be Starbucks or
Nike
By Paul Kemp-Rob ertson ,
Contagious Communications ,
Special to CNN
August 5, 2014 -- Updated 1057
GMT (1857 HKT)

CNN.com

Your sweat as a currency?

Editor's note: Paul Kemp-Robertson
is co-founder and editorial director of
marketing innovation consultancy
Contagious Communications. He has
written for publications including
Business 2.0 and The Guardian, and
his talk on alternative currencies has
been viewed more than 837,000 times
at TED.com. The opinions expressed
in this article are solely his.
London (CNN) -- I work in marketing. I
don't claim to be an economist or a
financial expert, but from my
observation of consumer behavior I can
see that people's definition of money is
starting to change and fragment.
The disruptive effect of digital and
mobile technology lies at the heart of
this, as well as a general decline in the
levels of trust being placed in
traditional institutions. Annual surveys
like the Edelman Trust Barometer
suggest that the world shows greater
faith in peers and corporations than
governments and central banks. This
decentralization of trust explains the
rise of peer-to-peer consumption

http://edition.cnn.com/2014/08/05/opinion/starbucks-nike-currency/index.html?eref=mobiles_republic

7/7