Corporate Feudalism and the Future of Money
This week, I’ve been enjoying the Pistachio Cream Cold Brew at Starbucks. I redownloaded the Starbucks app because you get double points for preloading money instead of paying directly. So now, almost every time I go, I throw $10 onto the app. I didn’t think twice about it — because, duh, I want the points. But then I learned something that completely changed my perspective.
I assumed Starbucks didn’t really “have” my money yet. But it turns out, they’re currently sitting on over $1.5 billion in stored customer balances. And when an entity holds an amount like that — what do we usually call it?
A bank.
Except Starbucks isn’t a bank. You can’t withdraw your balance, and you can’t use it anywhere else. It’s a closed-loop financial system. Amazon, Uber, McDonald’s, airlines — pretty much every major retailer — run similar loyalty programs and gift card systems that function as private financial networks. On an individual level, this is a convenience: faster transactions, rewards, and an easy way to pay. But zoom out and a shift reveals itself: companies are building their own economies and reshaping how money moves.
Why They Want Your Wallet
I assumed these programs exist for our convenience. But obviously, they are incredibly lucrative. Here’s why:
The Power of Preloaded Cash: When a company gets you to preload money onto an app, it gets to use your money before you do. It’s an interest-free loan. For a company like Starbucks, that means free access to capital with zero obligation to return it unless you buy their products. Meanwhile, they can use that money to invest, pay off debts, fuel operations, or just sit on it to improve their balance sheet. Interest-free loans are incredibly valuable because borrowing money — whether through bonds or bank loans — always comes at a cost. But when companies convince customers to buy giftcards or prepay, those costs are cut entirely.
No Regulations, No Problem: The Bank Holding Company Act restricts banks from using customer deposits for speculative investments. These rules exist because, historically, banks recklessly gambled with deposits, leading to financial collapses (think 2008). If you deposit $50 into a bank, that bank can lend it out or invest it, but they must follow strict rules to protect depositors, like providing insurance so you don’t lose your deposit in a crisis.
A retailer follows no such obligation. If Starbucks were a bank, it would need to keep a percentage of its $1.5 billion in reserves. But for a coffeehouse there’s no requirement to ensure you can cash out. There’s no FDIC insurance backing your balance.
And that’s the core difference: Corporate-controlled money doesn’t follow banking laws. There’s no safety net, no regulation. It simply exists, quietly growing.
The Money That Expires: Then there’s breakage revenue — the money customers load but never spend (that gift card $2.13 balance is pure profit for the company). Some industries rely on this. Airlines, for example, factor unredeemed frequent flyer miles into their financial projections. These “unused benefits” allow them to inflate the value of their loyalty programs while reducing actual payouts. Major retailers do the same knowing a percentage of balances will never be redeemed. It’s money they get to keep without providing any goods or services.
This system isn’t illegal. But it does mean companies are collecting and controlling billions in customer money without being treated like banks.
Corporate Currency
Right now, corporate financial networks exist on the sidelines. We still pay with USD. But if these systems keep growing, corporate money could compete with government-issued money.
Take Argentina as an example. In 2023, inflation soared past 200%, rapidly devaluing the peso. The government restricted foreign currency purchases, making it harder for people to escape the financial collapse. In response, people ditched the peso and started using alternatives — Bitcoin, Tether, and Ethereum — because they were more stable. Businesses began accepting crypto payments to avoid losing money to exchange rate fluctuations. The country’s new libertarian president, Javier Milei, supports Bitcoin and has openly criticized central banks.
The point is: when a national currency becomes unreliable, people turn to private alternatives.
Now apply this to the U.S. — not even because of inflation, but because of corporate incentives. Apple launched the Apple Card in 2019. Amazon offers loans to small businesses. If companies offer better financial perks than your bank and paying within a corporate ecosystem is better than using cash, why wouldn’t people shift?
Corporate Feudalism
Private financial networks are just one piece of the puzzle. Companies already shape daily life — salaries, healthcare, family planning, etc. If companies control how you pay, it’s only a matter of time before they control how you live.
The 1800’s in the United States saw the rise of company-owned towns during the Industrial Revolution that provided housing, jobs, and stores, all controlled by a single employer. Workers were paid in company scrip, a form of currency that could only be used within the company’s ecosystem. Convenient? Sure. But it also trapped workers financially, making them entirely dependent on the company for survival.
Healthcare is one of the biggest incentives for people to seek and maintain a job. Amazon has moved into healthcare with its acquisition of One Medical, giving it a direct role in primary care. Apple continues to integrate health tracking into its ecosystem, tying personal health data to its products. Meanwhile, Walmart and CVS are expanding into primary care clinics. The more companies control these necessities, the less individuals rely on traditional institutions.
Now just for fun, add dynamic pricing into the mix. Retailers already adjust prices in real time based on demand. If you buy a Starbucks latte every morning, the algorithm could gradually increase your price, knowing you’re unlikely to stop, while offering discounts to new customers to draw them in. This kind of price personalization is already used in industries like airlines and ride-sharing, where fares fluctuate based on factors like demand, location, and user behavior.
In e-commerce, companies like Amazon analyze shopping patterns to optimize pricing, potentially adjusting costs based on what they predict an individual is willing to pay. The result is a pricing system that isn’t reliant on broad supply and demand and is tailored to maximize profit from individual customers. The purchasing power of money shifts within these ecosystems as companies offer exclusive discounts and loyalty rewards, making their digital payments or store credits more valuable than cash.
The Future Runs on Points
So the line between corporations and government is blurring and disappearing. My biggest question isn’t whether this will continue, it’s whether anyone will even care.
I still load money onto my Starbucks app without hesitation. The incentives work. The gamification is too good. When a model delivers positive results, it reinforces itself, and that’s exactly how we got here — not through force, but through a system that simply worked better.
Money isn’t disappearing, but it’s being reshaped, rebranded, and filtered through ecosystems where the rules aren’t set by our government, but by the patterns of where, when, and how much we’re willing to spend.
References
Yahoo Finance: Don’t Keep Money in Your Starbucks Account
Forbes: Google Has Master Plan To Build A Massive Corporate Town For Its Employees
NYTimes: Elon Musk Is Creating His Own Texas Town. Hundreds Already Live There.
Amazon: Introducing Amazon One Medical
Starbucks: Annual Reports