Filed Under: Cash and cash replacement, Payments

Good night, cash

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Last year I had the opportunity to hear Henning Jensen, who was there at the very beginning, talk about the history of the Danish Dankort national debit scheme at and event held in Copenhagen to mark the publication of his book “Historien om Dankort”. If you are not familiar with it, all you need to know is that Dankort has been fantastically successful. It is used absolutely everywhere in Denmark and for absolutely everything. There is no reason to use in Denmark. Ever.

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I’ve been to Denmark a fair few times in the last few years (including an expedition to Roskilde) and I cannot remember the last time I ever even saw cash in the country, let alone used it.

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To recap, then. There is no reason to use cash in Denmark and nobody does. However, for historical reasons presumably going back to the time of the North Sea Empire, Danish Law forces retailers to accept it. It looks as if this is about to change. In what many cash supporters would undoubtedly see as the thin end of an inevitable wedge, the law is about to allow shops an exemption.

Since the introduction of the Dankort in 1984, shops have been required to accept cash if the customer insists… Now a majority in Parliament… has agreed to propose legislation that would allow shops to decide for themselves whether they will accept cash payments between 10 pm and 6 am.  The aim, according to those behind the law change, is to protect stores against robberies and provide security for employees.

From Danish shops could soon start rejecting cash payments at night – The Post

I’d be surprised if anyone notices if cash goes to bed at night. I’ve never met a Dane without a Dankort. In fact, sometimes I wish I had one.

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What might the be the likely high-level impact of this move? Well, a final push to ditch Danegeld for Dankort will be good for everyone. Cash costs society far more than debit cards and we all end up paying for that because the cross-subsidy from efficient electronic payments to inefficient cash payments is substantial. People like me who put everything on cards are still paying for ATMs, security guards, bank robberies and rascals blowing up Bexhill railway station.

the total social cost of payments in Denmark is calculated at 0.55% of GDP, of which 0.35% is attributed to cash and 0.15% to the domestic PIN debit scheme.

From Why would some retailers want to get rid of cash? Because of the others who don’t | Consult Hyperion

I hope Denmark pushes ahead and shows us the way. It should be a matter of course that we don’t use cash at night in polite society (except for buying cocaine and such like).

3 thoughts on “Good night, cash”

  1. d.true@paygilityadvisors.com' David True says:

    A fine end state, Dave, and for that small % of people in the world who think about payments, one that is shared.

    The prerequisites are many, large among them being low cost to merchants.

    And in my land, the US, that conditions is far off.

  2. avdbz429@bigpond.com' JOHN CANDIDO says:

    I really hope that Denmark or any other nation-state becomes the very first cashless society as soon as possible. The rest of the civilised world can then compare statistics on a plethora of social phenomena. Such as crime statistics for the drug trade, how safe taxi drivers and businesses generally will be once cash is gone, comparing the amount of non-cash robberies and its associated violence versus cash robberies and its level of violence, the amount of legitimate taxes the government collects, the amount of activity on the black market and crimes associated with the black market such as burglaries, any economic benefits such as any rise in GDP or economic activity, the effect of a cashless society will have on waiting times in shopping queues, what effect it will have on the number of credit card accounts and debit card accounts, identity crime, etc.

    Hi Dave, I was wondering if your Newsletter could allow software called ‘Grammarly’ to operate in where your readers write comments. It is an excellent spell and grammar checker that is completely free and operates on Facebook, on the clear majority of browsers and word processors. Thank you.

  3. iang@iang.org' Iang says:

    I’m looking forward to seeing some credible figures from India on how much damage has been done to the economy – is it 1% off GDP? 5% off? More?

    Not because I like gloating at adding misery to the already miserable, but because if there is a silver lining out of this, it is a lesson on how inapplicable western models are when imposed on developing nations.

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