By Richard Giedroyc
Merry old England may be having its problems with counterfeit coins and bank notes, but those same currencies are also increasingly being displaced by other forms of payment, according to the Payment Council.
A January study indicated credit cards and other forms of “cashless” payments will surpass coins and bank notes in financial transactions “within weeks.” Some of these other cashless payments are identified as being forms of online banking transfers.
According to the Jan. 30 International Business Times, “Analysis by the Times found that at the current rate, cash payments are falling and cashless payments are rising, the switch will take place on 8 March.”
Payment Council Communications Manager Mark Bowerman said, “We anticipate that this will be the first year that non-cash transactions volume overtake cash transactions. However, we are not expecting cash to disappear anytime soon. It will continue to be a very popular payment method for certain types of people and certain types of situations. We make lots of spontaneous low-value payments by cash at the moment and lots of us will continue to do so.”
The Payments Council is the body with responsibility for ensuring that payment services work for all those that use them in Great Britain.
Readers shouldn’t panic that coins as we know them are going to become a relic of our past. Non-cash payment systems will never fully replace coins and bank notes. There are good reasons both economically and politically why they shouldn’t.
Ecuador, as an example, sees electronic payment transfers as a way to get beyond its past financial and currency disasters. There is little trust in Ecuador’s current government. Why would anyone want to have their entire wealth stored electronically, with such a government able to view or manipulate that wealth? Can you imagine all of your money stored electronically if the country in which you live is a dictatorship? Big brother is watching!
There is no question some minor denomination coins are being withdrawn in some countries, but this is because inflation has eroded their purchasing power until these denominations are no longer functional. Australia, Canada, New Zealand, and Norway are good examples of this. At least some coin denominations may in the near future go the same way in Hong Kong. Politics rather than practicality are the reason the 1-cent denomination has not been discontinued in the United States.
While some of these small change denominations disappear larger denominations are now being issued in coin rather than bank note format for similar reasons. Australia has circulating coins in denominations as high as $5, while Canada has a $2 coin, the European Union uses a 2 euro, and Great Britain now uses a £2.
In October 2014 the South China Morning Post editorialized, “It seems the time has come to follow the lead of other governments and consign them [coins] to history.” During the same month the Saudi Arabian newspaper al-Madinah published the comment, “As a result of the sudden increase in demand for coins, a black market has suddenly emerged where Asian expatriates sell three ryals worth of coins for five ryals to [taxi] drivers desperate enough to pay the extra two ryals.”
Sweden claims to be the most cashless society on earth. Four out of five purchases made in Sweden are made electronically rather than by using cash. Even Sweden’s Royal Institute of Technology Associate Professor of Industrial Dynamics Niklas Arvidsson has admitted a 2014 survey indicated two thirds of Swedes still think cash possession is a human right. Arvidsson is an advocate of a cashless society.