As the world slowly but surely runs into the future, some everyday rituals and tools are destined to become unnecessary. And, according to Denmark and Sweden, cash seems to be one of those things. Scandinavian countries, faster than any other, are moving away from cash and are using cards and e-wallets a lot more.
Naturally, this is not a trend most countries follow – a cashless society is not an idea many nations deem good. Luckily for everyone, Denmark has managed to balance the situation well, and unlike Sweden, it decided not to forget about physical money just yet.
Which System Does Denmark Use?
Denmark’s neighbor, Sweden, has already forgotten all about cash, and today, the country takes great pride in being the first cashless society ever. The Swedes seem to enjoy this system just as much as their government. However, each country makes transitions at its own pace, and so does Denmark.
Although seeing Danish citizens paying for anything with cash is a rare sight, a good portion of them still demand that cash is absolutely necessary. Danes are known for their practicality, so they believe carrying cash around with them all the time is abundant. Moreover, Danes, just like their neighbors, put a lot of trust into their banking system.
Today, one can see that even hot-dog stands in Copenhagen take credit cards – they have installed smartphone-based payment systems for this purpose.
But here is the main difference between Denmark and Sweden when it comes to cash; in Sweden, a lot of business owners will refuse to take cash, which is still not the case in Denmark.
Changes in the Law
Up until 2017, all the businesses in Denmark were obliged to accept cash from their customers, however, this changed that very same year. The new law says that businesses have the right to refuse accepting cash in hours between 10 PM and 6 AM.
Only two years later, in 2019, the Government started to consider applying the Swedish model, meaning, to take physical money out of the equation overall. The research says that only 6% of Scandinavians still rely on cash, as opposed to 47% of Americans. In Denmark alone, 40% of the population uses Danske Bank’s MobilePay app for money transfers and transactions.
Sweden and even Norway have similar stories to tell. Even though Danes prefer cards over cash, many have raised concerns as to how will the most vulnerable ones function in a cashless society.
As rich as the country may be, there are still people who live below the average in Denmark, and the elderly often fall under this category. For that reason, the new law wouldn’t apply to pharmacies, doctors, and supermarkets. In short, these businesses would still be obliged to accept cash. Additionally, a lot of people believe that going fully digital will strip them of their privacy and can cause money theft issues. New data from ECB shows us that the fraudulent use of credit cards is costing countries billions of dollars. Europe alone loses approximately 1.3 billion Euros due to this.
Overall, the main reason why Scandinavian lands are so keen on eliminating cash is that the sole use of it is a source of grey economy. Trying to eliminate, or at least minimize its use certainly helps this cause.
For reasons like these, Denmark decided to postpone its transition to a fully digital economy for a little bit longer. Although, the officials did set a goal for Denmark to become cash-free by 2030.
What about Tourism?
Denmark’s wish to get rid of cash is one that will come true, sooner or later. But for the time being, physical money is still very common in the country. Denmark is a very popular tourist destination, with millions of people visiting every year.
Tourists tend to avoid using their cards abroad due to additional expenses that come with it, hence why they will always opt for cash. Most importantly, even though businesses in Denmark can legally refuse to accept cash in specific hours, none of them actually do so in practice.
So, for now, Denmark still remains loyal to the good, old cash. Completely eliminating the use of cash in a society, no matter how developed it might be, is a very long process that can last from 10 to 15 years. Therefore, in the meantime, these countries need to consider the already existing fiscal models which can be applied immediately.