Cash machines in Copenhagen. Danes haven’t needed to carry cash or even bankcards since payment via smartphone was introduced two years ago. Photograph: Fabian Bimmer /Reuters
In Stockholm you can pay a street hawker with a credit card. In Copenhagen you can buy a single shot espresso with your smartphone. In Helsinki, you can go grocery shopping but leave your wallet at home.
Scandinavia has long been the most cashless place on the planet. Now Denmark is considering whether to go a step further and allow retailers to ban cash altogether.
The Danish Chamber of Commerce is recommending that shops and services be given the option of going completely cash-free. The proposal needs to be approved by parliament but if it gets the green light, retailers could begin rejecting cash from January 2016.
“We’ve recognised what merchants have been telling us for some time now,” says Sofie Findling Andersen of the chamber of commerce. “Using cash is expensive, because it takes time for salaried employees to handle, and it’s also a security concern. Carrying cash opens you up to attack and even though we have relatively low levels of violent crime in Denmark, this is something business owners and employees tell us they worry about.”
There has been little resistance to the proposal from Danish media, consumers or businesses so far, with the country’s largest supermarket group, Dansk Supermarked, working on a system for cash-free grocery shopping with the mobile money transfer system MobilePay in the near future.
“Customers will be able to swipe their smartphone; scan their food; tap ‘accept’ when they’re done and then just leave,” says Mark Wraa-Hansen from Danske Bank, which runs MobilePay.
“We’re negotiating fixed costs for this for big businesses and then smaller merchants will pay a standard price of 1% of the transaction up to 5 DKK [about 50p]: roughly the same price as with a card. So it’s not too much to pay – we want a simple model and a good relationship with companies and so far it is working well.”
Small businesses seem equally keen on going cash-free when weighing up potential costs versus the convenience of the new move.
“So few customers pay with cash anyway now that it’s a bit of a hassle when they do,” says Mette Schmidt, who runs a hairdressing salon in Jutland. “I have to go to the bank to drop off the takings at the end of the day, looking over my shoulder to check there’s no one suspicious around, and then the bank charges me 30 DKK a time to drop off money. It’s easier to be paid by card or MobilePay - as long as my customers are happy and ready to make the change.”
However, change won’t happen overnight, say experts.
“If we look to Sweden, the country leading the way in terms of a cash-free society, we see that plenty of people are still paying with kroner,” says Findling Andersen. “It’s up to customers and businesses to decide which works best for them – if a shop switches to cash-free and they lose a couple of customers, they may decide it’s worth it to make their jobs easier and safer.
“For customers, they can pay for things more quickly without waiting in line,” she adds. “Customers already tell us they prefer cards to cash, so we just want to make this easier.”
There is plenty of evidence to suggest this is the case. On a drizzly morning in Vejle, southern Jutland, several shoppers queue to pay for gum or a bottle of water at a 7-Eleven with just their credit cards. Sheltering from the rain inside Lagkagehuset cafe, half a dozen customers pay for their coffee on plastic.
“It’s just easier this way,” says retired kindergarten teacher Susanne Nedergaard who has bought a latte on her debit card. “I prefer cards and I also use MobilePay a lot. I wouldn’t mind getting rid of cash.”
Barista Soren Jensen, 27, agrees: “It’s much better for us when people pay by card – it’s quicker, simpler and cleaner – cash can be pretty dirty! I think most people would be OK with just cards and MobilePay in Denmark.” Last year a US study found 3,000 types of bacteria on bank notes.
The move towards a brave new cash-free world is supported by the UN Capital Development Fund’s Better Than Cash Alliance, which aims to accelerate the shift to electronic payments, funded by the Bill & Melinda Gates Foundation, MasterCard and Visa.
But opponents of the concept express concerns about loss of liberty. German central banker Carl-Ludwig Thiele recently criticised the Danish government’s proposal, saying that “abolishing cash would hurt consumer sovereignty - the free choice of citizens about their payment instruments”, and citing Russian novelist Fyodor Dostoyevsky’s famous line: “Money is coined liberty.”
While Swedish pensioner groups say elderly citizens may feel alienated or unable to cope with the demands of new technology, Danish pensioners are remarkably sanguine about reliance on smartphones.
“We have one of the highest rates of 60-plus citizens who already shop online and are tech literate, so this shouldn’t be too much of a problem for them,” says Findling Andersen.
Wraa-Hansen agrees: “Our research shows that the elderly in Denmark prefer paying by cards and by smartphone – our oldest MobilePay user is 104.”