Denmark Announces Plans to Start Doing Away With Cash Transactions

The Danish government announced plans to remove legal requirements that certain vendors must accept cash. The plan would allow gas stations, clothing stores, and restaurants to stop accepting cash in favor of purely electronic transactions facilitated by payment cards or other online payment tools.

The Danish government announced plans to remove legal requirements that certain vendors must accept cash. The plan would allow gas stations, clothing stores, and restaurants to stop accepting cash in favor of purely electronic transactions facilitated by payment cards or other online payment tools.

The announcement came as part of 50 proposals made by Denmark’s Ministry of Finance designed to modernize and streamline doing business in the European nation. Several Nordic countries have signaled an intention to move toward increasingly currency-free economies, but Denmark is the first to officially propose such measures.

The concept of a cashless economy has been a hot button topic for a number of economists, politicians, and other financial experts. The idea is far from simple, but it could have far-reaching benefits for nations that adopt it. For example, expenses related to minting new bills and coins and removing old ones from circulation would disappear. Money laundering would be much more difficult thanks to the death of the cash-based business, and other forms of illegal cash skimming or cash-only black market transactions could no longer take place. Moreover, consumers would no longer need to worry about losing a wallet full of cash, and businesses could reduce their expenses associated with counting change and making runs to the bank for cash deposits.

Of course, the plan is not without its detractors. Some point to the “big brother” effect of having every transaction recorded electronically, or facing the problems in the aftermath of a disaster if access to electronic communications necessary to complete cashless transaction became impossible. Moreover, anyone unable to obtain a form of electronic payment, or who lost his or her cards could find himself or herself cut off from financial means.

Nevertheless, the plan does have strong merits and a groundswell of support, and Denmark may be the perfect proving ground for this new way of doing business. According to a report in Quartz, nearly every Danish adult owns at least one form of payment card, and only about 25 percent of all transactions in 2014 involved the exchange of physical currency. Denmark’s Central Bank already announced last year that it would stop printing banknotes and coins, and many Danish banks no longer carry physical currency.

While the plan to move to a cashless economy may raise concerns about consumer access to necessary goods and services, it does appear as though this movement will gain momentum over the next several years. Sweden and several other Nordic countries have already signaled the intention to move to a cashless system, as well, even if doing so requires pushing consumers into this new way of doing things whether they like it or not.