Countries on the verge of cash extinction

In some countries, cash is like a "bogeyman" when card payments are preferred. In some places, cash is not even considered legal tender, according to the BBC.

A Wall Street trader once said "cash is king" and advised people to hold on to it when the economy gets tough. However, that advice is no longer relevant in some places.

In the Netherlands, cash is no longer considered a luxury, and in many places it is not even legal tender. More and more shops in the country, from pharmacies to local bakeries, only accept card payments.

“I can’t remember the last time I received a cash payment,” said Marielle Groentjes, a manager at Hoen Property Management BV, adding that office workers like her don’t like to keep cash in their rooms, there are no safes and banks charge fees for keeping it there.

At the supermarket, instead of waiting in long lines to pay, swiping a card saves people time. Photo: Alamy.

“When I bought a tuna sandwich at the Dutch chain Vlaams Broodhuys, the cashier refused to accept cash. I can’t even use euros to pay for parking in many cities,” said one woman.

“Cash is a dinosaur, but it will survive,” said Michiel van Doeveren, a senior policy adviser at the Dutch central bank (DNB). But he pointed out that the logistics of moving cash around, such as transport, security, inventory and registration, are expensive, while electronic payments are easier.

“The key is the rise of the digital economy. We want to promote more efficient payments,” he said.

Dilemma

Electronic payments in shops and supermarkets in the Netherlands overtook cash payments for the first time in 2015 by a margin of 0.5%. A coalition of Dutch banks and card merchants wants to increase card usage to 60% by 2018. They say paying bills without cash is cheaper, safer and more convenient.

Like the Netherlands and its Nordic neighbors, Sweden is also one of the places where cash is disappearing.

"It's a big problem. Small businesses spend a lot of money to put money in the bank," said Guido Carinci, president of the small business association TOMER. He said the situation was "terrible" and said it costs $35 per company a month to deposit cash into its own account.

In addition, Carinci said Swedish banks make huge profits from collecting transaction fees from retailers who accept card payments, amounting to millions of dollars a year. However, the revenue from cash is almost non-existent, making banks reluctant to accept it.

High transportation costs have led many stores to reject cash, including telecommunications giant Telia Company (since 2013). Meanwhile, the country’s buses have been rejecting notes and coins for years.

The problem has gotten so bad that many Swedes are left wondering what to do with them when banks don't want them, said Bjorn Eriksson, head of the security industry union Sakerhetsbranschen.

New era

However, many other countries in Europe in particular and the world in general still value cash. In Germany, consumers feel more in control of their spending when they do not pay by card. More than 75% of payments are still made in cash. Meanwhile, in Italy, the figure is 83%.

And Americans still love their dollar bills. But last year the country adopted chip-enabled credit cards, a decade after many European countries. Economists say it’s a move toward going cashless.

In January, several locations of the restaurant chain Sweetgreen stopped accepting cash in the Wall Street area.

“I was surprised to see so many young people using their smartphones to pay. I know my daughter uses Venmo for everything. It makes me feel old-fashioned and outdated,” said New Yorker Persephone Zill.

Advances in mobile technology have already been seen in some African banks. Kenya and Tanzania are examples. The mobile banking system M-Pesa allows millions of people to pay bills, receive salaries, buy livestock and even pay for groceries using their mobile phone accounts.

According to zing/BBC