We need to discuss alternatives to cash
Corona has breathed new life into the debate on the future of cash. ‘It needs to be brought up’, says Finansforbundet’s Vice-President Steen Lund Olsen, who calls for a broad discussion of the essential dilemmas of a society with or without cash.
The Corona crisis has breathed new life into the arguments for getting rid of cash, as paper money and coins in circulation change hands and thus may potentially carry a risk of infection.
‘The fact that cash can literally be dirty is well known to us in the sector, but in many ways, Corona has given this perspective new life. This is very much one of the many relevant elements in the discussion on the future of cash, and it’s time to address it, because it’s not uncomplicated. And it’s necessary to be politically and socially active in the debate, because of course there’s a development underway on the digital front that needs to be paid attention to. That’s why we need to take it full circle’, says Steen Lund Olsen, Vice-President of Finansforbundet.
Good for health and crime?
It could be a health benefit to society to phase out cash if paper money and coins are spreading infections e.g. Covid-19. Similarly, there is of course also the crime aspect’, Steen Lund Olsen points out.
‘It’s relevant to ask whether we should, for example, start by getting rid of the thousand-kroner banknote here in Denmark. It’s still in circulation but not amongst very many citizens, and of course it’s relevant to take a closer look at the function the banknote actually has today’, says Steen Lund Olsen.
One argument against getting rid of cash has long been that socially disadvantaged citizens and the elderly, who do not use electronic payments, will be excluded.
‘Phasing out cash requires digital alternatives and it also means payment solutions for disadvantaged citizens. The sector offers a lot of opportunities here today, but of course it takes time for them to be incorporated into daily use and find their place in practice, because the social dimension is hugely important. This requires more attention to the solutions that exist – and, of course, to whether the solutions are enough’, says Steen Lund Olsen.
Monitoring individual spending
One issue with using digital payments has to do with data ethics.
‘Electronic and digital payment solutions are convenient, cheap and effective for Danish consumers, and we are really far along in Denmark, even from an international perspective. But there are also data ethics considerations, because in principle digital transactions also leave a footprint, which makes it easy to monitor individuals’ spending patterns on a very detailed level. This might be smart enough if it can reduce crime but also interferes with fundamental issues of freedom and surveillance. The future is certainly becoming more digital, but precisely because ethics is one of the key elements in the broader debate, it’s time to take up the topic’, says Steen Lund Olsen.
Fewer Danes use cash
From 2017 to 2019, the percentage of Danes who do not use cash doubled from 17 to 34 per cent. In particular, older people between the ages of 70 and 79 have adopted other forms of payment in the past few years. Only 22 per cent of the age group’s payments were in cash in 2019, compared with 40 per cent in 2017, according to a study by Danmarks Nationalbank.
The fewer cash payments are in line with the number of transactions with MobilePay having increased from DKK 231 million in 2017 to DKK 331 million in 2019 and the total amount transferred via the mobile app having increased from DKK 65 billion to DKK 102.6 billion during the period.