"Sorry, we don't take cash."
No, not cards. Cash.
It's fair to say the bloke in front of me in line at the bar was far from impressed. (Something about 'isn't my money bloody good enough?', bookended with some expletives, if my memory serves.)
I have to say, I didn't share his unhappiness. Any time I can tap my card (or, preferably, my phone) on a card reader is good by me.
No going to the ATM (and paying ATM fees, more often than not). No dealing with coins weighing down my pockets, and no hassle in trying to work out if I can make the correct change.
Just pure bliss.
Of course, I'm old enough to remember when you'd oh-so-carefully dispense the last few drops of Super into the petrol tank as the bowser slowly clicked over.
$19.97….. $19.98…. $19.99….
Most of the time, the next stop would be $20.
But sometimes, as the numbers hit $20.01, you'd have to decide whether you really wanted something-and-99-cents in change, or whether you'd just stop — hopefully — at the next round number.
And yes, kids, there was a time before cash registers automatically rounded your transaction to the nearest 5 cents. I'll tell you about it, one day, but for now, just know that the feathertail glider and frill-necked lizard once graced copper-coloured coins in Australia.
And don't ask me what coins are. I know you know those… even if for not much longer.
Which leads me nicely back to my story.
The venue was the Sydney Cricket Ground. It wasn't exactly a beautiful day — there was a little pre-event drizzle — but the one and only U2 were playing, and the rain wasn't going to be enough to dent my pride. (Being a good husband, I was only too happy to meet my wife's desire to see the band, so bought her the tickets for her birthday. Plus, I didn't ask, but I feared she might have said that if I didn't buy them for her, "I'm going with or without you" might have been the response.)
And it wasn't just the bar. You couldn't buy any merchandise with the folding stuff, either.
You could tap. You could insert. And you could swipe. But, no matter how badly you wanted to, you couldn't pay with cash.
Surprising? No, probably not. The use of cash as a means of payment has been falling for ages. Even the RBA has been reporting on its decline.
And if you were wondering, the culprit isn't Bitcoin… it's simply cards.
Credit and debit cards are just how most of us pay most of our bills these days.
And while Afterpay Touch Group Ltd (ASX: APT) has taken Australian retail by storm — and true, it's likely increased the pace of the change — there's been no seismic shift. This is a decade-long trend continuing to play out.
There are some interesting 'so whats' from this shift for investors, too.
I wouldn't be buying shares in Armaguard or note-printing companies any time soon, but it's not just that.
It's a symptom of the broader trends in consumer spending.
Think about the number of subscriptions you and your family have. Maybe you have Foxtel. Kayo. Netflix. Apple. Disney+. Google Play. A gym membership. Newspaper. Magazine. Add in your mobile phone and internet plans. Subscription businesses are here to stay, and are siphoning money away from one-off irregular purchases.
We're also paying for life in instalments. Yes, there's Afterpay (and Zip, Humm, OpenPay, Klaarna and plenty more). But that's just taking credit card-style payments to the debit card world, and Australians love putting our purchases on the never-never.
And online purchases continue to grow. Not only online pure-play retailers like Amazon and Kogan, but even the likes of Premier Investments-owned Smiggle, Peter Alexander and Just Jeans are growing online sales at a huge rate of knots.
And there are plenty more. It won't be too many years before we reach a tipping point and even our most recognised 'bricks and mortar' retailers are selling most — or at least a massive minority — of their goods online.
I don't know that I want to be a shareholder in a physical retailer that can't cut costs quickly enough. The aforementioned Premier won't be one of them: it's already actively closing stores where the sales can't adequately cover the rent — including in previously high profile and 'destination' locations such as Melbourne's Chapel Street.
Speaking of which, you probably also want to be careful of long-term holdings in property companies, too. The ones worth owning will be those that can either actively pivot to different retail offerings (including so-called 'experiences' in shopping centres), or those properties who offer stores, goods or experiences that can't easily migrate online.
(But be careful: once upon a time buying groceries online was supposed to be unlikely. Things can change more quickly — and more surprisingly — than you might imagine.)
Foolish takeaway
Before a recent work trip to the US, I grabbed US$300 in cash. Between cabs, splitting bills, tips and the uncertainty of who'd take cards, I wanted to be safe, rather than sorry.
I needn't have worried.
In the event, I bought US$280 home, the only cash transaction over those 10 days was my contribution to a split drinks bill.
Yes, as if we needed a reminder, the world — and the economy — is changing. And while investing has never just been about extrapolating the past, the pace of change is quickening.
That doesn't mean we shouldn't invest for the long term, but it does mean making sure the businesses we buy shares in have plans for a disrupted and ever-changing future.
I think retailers like Amazon, Kogan and Premier will be among the winners, over time (and I own shares in the former two, which are both active Buy recommendations in Motley Fool Share Advisor).
Some property trusts and shopping centres will make it, too. But I'd be looking for A-grade, destination shopping centres, that are as much meeting places as retail establishments.
And whether Afterpay is the next big thing or not, it won't be the last. Change is, as ever, the only constant, and investing in businesses who know and address that fact is the best way to succeed.
Hoping things won't change is a risky — and, I think, losing — bet.
Fool on!
