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View Poll Results: Are you for or against cashless society without banknotes?
Against cashless society 145 79.23%
Undecided 9 4.92%
For cashless society 29 15.85%
Voters: 183. You may not vote on this poll

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Old 11-27-2018, 01:14 AM
 
Location: Cebu, Philippines
2,445 posts, read 894,656 times
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Quote:
Originally Posted by Ian_Lee View Post
In fact, China is more advanced on this aspect. Most people use cellphone to pay for everyday purchase. In some cases, the purchase can only be paid by cellphone while cash is not accepted.
Ha. I misread that as "cellophane" and I thought they had introduced transparent polymer bills.
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Old Yesterday, 09:49 AM
 
9,155 posts, read 9,356,091 times
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Quote:
Originally Posted by munna21977 View Post
So how was the payment system in Iceland, Finland. Greece all those years ago ?

Surely there were no Smartphones and app payments.
Very little online banking and internet services.
Common Masses used Diners Club Cards or what ??
Visa was founded in 1958; (as BankAmericard)
Mastercard was Founded in 1966; (as Interbank Card Association) 1979; (as Mastercard)

I said 30 years ago in Iceland, not 60 years ago. Without smartphones cash was still primarily used for person to person transactions. I should point out that Iceland in addition to having a very small population, suffered from massive inflation. The currency in Iceland had to be revalued in 1981 to remove two zeros. Removing zeros is relatively common in Latin America and in Africa, but it is seldom done in Europe. Italy issued a 500,000 lira banknote in 1996.

After the re-evaluation in Iceland in 1981, it became much easier to conduct all transactions involving a business with bank credit cards. By 1985 Iceland had only 1% of it's GDP circulating in cash.
The 10,000 ISK (Icelandic Krona) worth 70.9EUR=62.6GBP is now circulating at over 10 banknotes per capita
===============================
By the 1990s Finland, France, and Britain made heavy use of credit cards as well. In addition, none of those countries seemed to have the cultural need to store away money in large denomination banknotes like the Germans, Austrians, Belgians and Dutch. France went from 3.1% GDP in banknotes and coins to the Euro Zone average of 10.7% GDP.

There has been a large jump in physical cash in most of the world (except Sweden). The best measure is by percent of GDP. The table shows the change from the year 2000 and 2016 which is long after we have plenty of credit cards.

2000 Country 2016
5.5% United States 8.1%

3.1% France 10.7%
4.2% Netherlands 10.7%
4.8% Belgium 10.7%
6.0% Italy 10.7%
6.2% Germany 10.7%

4.1% Sweden 1.4% (only country on this list to drop it's cash in circulation)
3.3% Canada 4.2%
3.2% United Kingdom 3.9%
7.7% Switzerland 12.3% (much of Swiss cash is circulating outside of Switzerland)

7.1% Singapore 10.4%
7.2% Hong Kong 16.9%
12.1% Japan 20.0%

Note: I used the year 2000 because the fixed rates of exchange with the Euro had been in affect since 1999, but the physical banknotes and coins were not issued until 2002. In the year 2001 people made a large effort to eliminate cash since they didn't want to be audited during the changeover.

Quote:
There are personal and cultural opinions about what is the best amount of cash to circulate. Too little cash and there is a loss of personal freedom, the ability to operate outside of banks, and the inability to function if power and cellular networks are down. Too much cash and the economy can stagnate, it aids criminal activity, and the notion that GDP backs up currency becomes strained. But it is shocking that only Japan had more than 8% of GDP in cash in the year 2000, and now most of the world is higher than 8%.

Virtually every central bank in the world pretends that they have no goals for cash circulation, and that they just print cash to meet demand.
===============================


An interesting development may happen in Sweden. Five years the 7 largest banks introduced the smartphone app named SWISH to allow person to person transfers of money between two people that both have bank accounts. It has been wildly successful with banknotes in circulation being reduced by over 50%, the banks refusing to handle cash at teller windows. While ATMs are about as scarce as they are in Africa, the real problem is that most ATMs won't take deposits of cash. So while consumers can get cash, it is often very difficult for businesses to deposit cash. The result is that businesses must keep cash in registers and safes which means that an increasing number of businesses simply don't accept payments in cash.

The total reliance on ATMs also means if there is a solar pulse that shuts down electricity , people can't even get physical cash. The total cash in circulation is so low, that people clearly don't have much stored in home safes.

But commercial banks are not charities, and they are thinking that it may be time to start charging a fee to use SWISH. With much of the cash infrastructure destroyed, it may be difficult to return to the peak of circulating cash (roughly the year 2007).

The government of Sweden will probably start circulating digital currency which is issued by the central bank and has more in common with banknotes than credit cards. That will give citizens an alternative to SWISH. But it may set up a kind of competition between the commercial banks and the central bank.

Since the Swedish currency has varied from 11.67 to 8.19 SEK/EUR since 2002, doing transactions using EURO banknotes does have some exchange risk.

Last edited by PacoMartin; Yesterday at 10:55 AM..
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Old Yesterday, 12:51 PM
 
Location: World
3,244 posts, read 3,256,912 times
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How much are the interest rates on Deposits like CD in Sweden ?? If they are near zero and there are charges to use SWISH, it will be foolish for common people to discard cash.

This is detrimental to Foreign visitors to Sweden. Not every Foreigner has smartphone apps set-up for payments. Foreign bank cards are either refused or slapped with multiple charges. Try making a payment on some Indian Bank Debit card in Europe !!

Last edited by munna21977; Yesterday at 01:49 PM..
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Old Yesterday, 03:01 PM
 
Location: Honolulu
1,036 posts, read 419,723 times
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I am less bothered by using cash but the amount of bank notes involved in each transaction.

For example, in Japan and South Korea where cash is still commonly used, the largest denomination in banknote are 10,000 Yen (US$87) and 5,000 Won (US$44) respectively. And because things are not cheap in either country, especially Japan, so whenever I travel to either country, I have to bring an extra large wallet to fit all those banknotes in.

Europe is better with the 500 Euro banknote. But now they are phasing it out.
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Old Yesterday, 03:17 PM
 
Location: Honolulu
1,036 posts, read 419,723 times
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And of course, the most bothering is the coins.

For example, in UK, there are coins denominated in one pence, two pence, five pence, ten pence, twenty pence, fifty pence, one pound and two pound in circulation. Some are silver, while another one is gold in center with silver on the rim. And another one has a hole in the center. I never can tell which is which and usually I just open my purse and let the cashier choose.

Also I must have different combination of coins with me anytime because so many toilets need exact change to go in.

Another problem is foreign coins, especially UK & Europe & Switzerland, are much heavier than U.S. and Canadian coins.

The last problem is country like UK loves to mint new coins about every 20 years and the old coins became obsolete. I have three batches of British coins that are minted in three different eras. The only way I can replace the two older batches is via bank. But as a tourist, who would go the extra mile to just replace coins?
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Old Today, 01:27 PM
 
Location: World
3,244 posts, read 3,256,912 times
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Quote:
Originally Posted by Ian_Lee View Post
And of course, the most bothering is the coins.

For example, in UK, there are coins denominated in one pence, two pence, five pence, ten pence, twenty pence, fifty pence, one pound and two pound in circulation. Some are silver, while another one is gold in center with silver on the rim. And another one has a hole in the center. I never can tell which is which and usually I just open my purse and let the cashier choose.

Also I must have different combination of coins with me anytime because so many toilets need exact change to go in.

Another problem is foreign coins, especially UK & Europe & Switzerland, are much heavier than U.S. and Canadian coins.

The last problem is country like UK loves to mint new coins about every 20 years and the old coins became obsolete. I have three batches of British coins that are minted in three different eras. The only way I can replace the two older batches is via bank. But as a tourist, who would go the extra mile to just replace coins?
I love coins as they help me purchase water bottle or a quick drink or a Luggage Cart at Foreign Airports while transiting or after reaching the destination.

I keep a collection of coins like 2 Dirham coins is enough to quench my thirst at Dubai Airport, a Ten Rupee Coin at Delhi Airport machine, anything less then two euros are enough in Germany, Spain without the need for using banknotes or looking at ATM. In UK, I need 1 pound coin even for baggage trolley after landing.
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Old Today, 02:57 PM
 
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Quote:
Originally Posted by Ian_Lee View Post
And of course, the most bothering is the coins.
Quote:
Originally Posted by Ian_Lee View Post
South Korea where cash is still commonly used, the largest denomination in banknote are 5,000 Won (US$44). And because things are not cheap in either country, especially Japan, so whenever I travel to either country, I have to bring an extra large wallet to fit all those banknotes in.
You are missing a zero since ₩50,000~US$44

Prior to 2009 the largest banknote was ₩10,000 which made going to the ATM a nightmare. Presumably they are mortally afraid of North Korean counterfeiting.

In three years, South Korea will make all coins invalid. As most people will not want to forego receiving change, you can expact most transactions to be conducted electronically. The everday use of ₩1000, ₩5000 and ₩10000 banknotes should radically decrease. Only the ₩50,000 will remain popular.

Quote:
Originally Posted by Ian_Lee View Post
Europe is better with the 500 Euro banknote. But now they are phasing it out.
Th €500 banknote peaked in circulation at 613 million notes in December 2015 when the ECB announced that it would not be updated in 2019. The last note of the old series was produced in 2014. Circulation has been reduced to 521 million notes as of today. Although the note will not be included next year when the new €100 and €200 note are introduced, the ECB is producing over a billion €200 banknotes so that the amount of circulating cash is not reduced.

The old €500 banknote will remain legal tender possibly forever, but without an update it will become harder and harder to use. People who hold them will mostly switch to the new Europa series €200 banknote. But Switzerland is counting on the fact that some people love holding large denomination banknotes. Switzerland will issue a brand new 1000CHF ~ €881 banknote in 2019 with 13 elaborate security devices making it effectively impossible to accurately counterfeit.

The current 1000CHF note is circulating 48.26 million pieces at the end of 2016. It seems unlikely that a country of just over 8 million people are using all of those high value banknotes. If they end up circulating over 100 million pieces of the new 1000CHF banknote all over Europe and possibly in other parts of the world, that will be a hugely successful business for the Swiss government. They may even be able to lower tax rates.

Accounting does not recognize circulating your banknotes outside of your country as profit. Those banknotes are on the books as a "liability". However, a liability that is never redeemed is essentially a kind of profit, even though a central bank is not considered a profit earning institution. However, you want to view it, the banknotes cost only a few dollars to produce, and someone has to come up with a thousand dollars of goods or services to get these banknotes, just to put them in his safe.
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Old Today, 07:17 PM
 
4,940 posts, read 2,357,827 times
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Quote:
Originally Posted by munna21977 View Post
Foreign bank cards are either refused or slapped with multiple charges.
It's always wise to have some cash, but you can get credit/debit cards with no forex fees that reimburses the foreign ATM fees. I pay $0 in fees when using credit cards or ATMs overseas, and I use the credit card almost every day.
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