With mobile payments in the ascendancy are direct debits on a path to redundancy? If so, it could be a good thing for relationships in fundraising, says Reuben Turner.
I went to a fascinating talk about the future of money the other week, given by a payment systems guru (they exist!) called Dave Birch.
It helped to make sense of a few thoughts that have been going through my mind lately about how we pay for things and, more importantly, how donors give.
Making giving easy is a subject that is - or shoudl be - on all of our minds. Writing a cheque (boring!) or filling in a direct debit form (really boring!) now seem ridiculously antiquated compared to giving by SMS or PayPal. But these low-friction transactions come with problems of their own – lack of rich data, low gift rates, terrible gift aid conversion and the inability to build a multi-channel relationship (read: ‘a relationship’) with donors.
They are ciphers, really, for the ways in which what charities want and what the mass of donors want are slowly pulling apart. We want a relationship, long commitment to our cause, and regular giving. And data. Donors want to be inspired, motivated in the moment, and to give when it suits them, for the sense of an immediate reward. And control.
The trouble is, that’s not just the way donors are going. It’s the way payment systems are going too.
Money itself is, as Dave Birch describes it, ‘a hack’ – a substitute for bartered goods, springing up from a large and sprawling world where people were no longer able to trust name, reputation and a verbal promise. Cash is a hack. Cheques are a hack. Plastic is a hack. Direct debit is a hack.
His prediction, and that of many money analysts, is that plastic cards and direct debit will die out before cash does. They are hacks, designed to get around the fact that the immediate, simple transactions most people would prefer, have simply been too difficult – due to the technology we have available.
But mobile is changing that. Your mobile device now has the power to carry out the transactions and, crucially, to verify your identity. We’re back to an era of immediacy and trust.
Giving will get easier – in the jargon, frictionless. Street givers will be able to donate 50p or £50. Major donors will be able to donate a million. All through their mobiles. There and then.
But personal data and identity will remain a battlefield, with people more aware of its value, and less willing to trade it. Meanwhile the old ‘hacks’ that have suited fundraisers so well – like direct debit, PSMS – will fade, like cheques. They’ll still be around. But are they really the future?
I’ve been banging on for years about the fact that direct debit is a relationship with a donor’s bank account, not with a donor. Well, we’re moving into an era where the relationship really will be with the person, not the account. And that means working harder to inspire, to offer value and create moments of real meaning.
The rest is just a transaction now.
