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In the July 4 Business section of the New York Times, Technology Eases the Ride to Higher Tolls offers an interesting perspective on using RFID to collect tolls on roadways. Systems like E-Z Pass make it faster and more convenient to pay tolls, but inevitably they also make it more expensive. Because motorists don't get the same sense that they are paying actual money, governments are freer to raise the tolls more frequently and by larger amounts. Roadways with RFID toll-collection systems generally experience larger toll increases than roadways that do not.
The article also cites research showing that consumers spend more when they use electronic forms of payment. They become generally less aware that they are spending real money. I think this explains - at least in part - why consumer debt is at an all-time high and continues to increase. And electronic spending is replacing cash spending. In 2003, cash was used for 55% of all consumer spending. In 2007 it's 45%. In percentage and total dollars, that is a huge change in a short amount of time.
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Without question, new forms of more convenient electronic commerce offer real benefits to consumers and merchants alike. But they also introduce problems. Unlike cash in your wallet, a credit or debit card doesn't tell you your level of expenditure or your outstanding balance. That creates a challenge for consumers. Wouldn't it be interesting if these cards could display your balance as you use them? That might help consumers to spend more responsibly. Unfortunately it might also lead to reduced consumer debt and the card issuers would be against that.
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