Danish shops to be given right to refuse cash

Danish shops to be given right to refuse cash

Denmark's government is planning to help usher in the long-awaited cashless society by giving restaurants and some shops the option to refuse notes and coins.

As part of a pre-election package of economic measures put forward by the government, from the beginning of next year selected retailers, including restaurants, clothing stores and gas stations, would no longer have to abide by a rule forcing them to accept cash.

Grocery stores, post offices, places selling prescription drugs, doctors and dentists, would still have to accept physical money under the plan, which needs parliamentary approval.

Explaining its proposal, the government says that accepting cash puts a considerable financial and administrative burden on retailers. At the same time Danes are turning to debit cards and other electronic payment options.

The Danish Chamber of Commerce welcomed the move, saying in a statement: "It will make it cheaper and easier for many companies, if in the future they can choose to receive payment via card or mobile."

Comments: (15)

Stanley Epstein
Stanley Epstein - Citadel Advantage Group - Modiin 07 May, 2015, 12:163 likes 3 likes

Absurd! Delegitimizing cash (in effect cancelling its status as legal tender) is a really bad move. If accepting cash, as the Danish government says puts a considerable financial and administrative burden on retailers, what sort of burden will be placed on consumers by forcing them to pay by alternative non-cash means? Will the Danish government confer legal tender status on alternative payment mechanisms like virtual currency, credit cards? What of poor tourists?

Sounds to me like a copout to big business to help them cut costs.

Robin Setty
Robin Setty - ACI Worldwide (EMEA) Limited - Watford 07 May, 2015, 13:12Be the first to give this comment the thumbs up 0 likes

But alternative payments needn't be a burden on the consumer.  Personally, if I can't make a convenient card purchase that's when I feel inconvenienced.  The thought of having coins rattling in my trouser pocket because I need to break into a note to buy a sandwich draws me away from a retailer that doesn't take cards.  Is my attitude that unusual?

Bill Thomas
Bill Thomas - UNFCU - Long Island City 07 May, 2015, 14:111 like 1 like

I'm with Stanley...the government is shifting the burden to the consumer at that point.  There are costs associated with maintaining an account linked to a card and not everyone necessarily wants their personal data potentially exposed with every purchase.  It's interesting because so many merchants complain about the "burden" associated with the costs of using card networks.  In the end, the consumer will lose.

A Finextra member
A Finextra member 07 May, 2015, 14:20Be the first to give this comment the thumbs up 0 likes

I don't know fur sure in Danmark, but in Belgium there are plenty of option to get a card for free with (nearly) free bank accounts. You needs a bank account and the card anyway to withdraw cash.

This move simply gives a little more freedom of speech if you ask me. It is like only accepting debit cards instead of debit+credit cards

A Finextra member
A Finextra member 07 May, 2015, 14:251 like 1 like

Let me say as a preliminary that I completely agree with Robin Setty's comments above. I feel incredibly privileged to be alive to witness this unprecedented and historic act by the Danish Chamber of Commerce. As an advocate of a cashless society this ground-breaking news is exactly what I have been aching to see for a very long time. What we are witnessing in Denmark is the harbinger of the end of cash in that country and elsewhere, whenever other nation-states follow their example of staggered cash bans in selected retail sectors.

When nothing less than the Chamber of Commerce in Denmark, which represents the nation's retailers, actively lobbies the Danish parliament on behalf of their members to ban cash in selected retail outlets as a preliminary, short-term provision with similar, evolving, broader actions planned in future. You inexorably come to the realisation that the modern world has arrived at the tipping point of the death of cash in modern society. Make no mistake about this article from Denmark. This is the sociological or symbolic end of notes and coins. It is the coup de gras for cash. 

A Finextra member
A Finextra member 07 May, 2015, 20:352 likes 2 likes

How short sighted anyone is who thinks this is a good idea.  This is nothing less than forced interchange on merchants which will only lead to consumers having to pick up the increase in costs.  The only real benefactor of this legistation will be banks in decreased costs in handling cash & increased revenue in interchange fees. Consumers will be left holding the (empty) bag yet again.

A Finextra member
A Finextra member 08 May, 2015, 04:20Be the first to give this comment the thumbs up 0 likes Totaly agree with Kevin...call it audit trail, AML, reducing any black market...or whatever. It will reduce personal options for choice.
A Finextra member
A Finextra member 08 May, 2015, 06:16Be the first to give this comment the thumbs up 0 likes

While this is a good move by the govt. to ensure cash transactions are limited and transperency is brought in transactions it should also ensure that the customers using the cards are not held at ransom by the card issung bank / agency in terms of maintaining some minimum balance in their account or paying some annual fee for card maintenance. Any such requirement will be like holding the customer at gun point to maintain something (card), which they may really not need at all. 

A Finextra member
A Finextra member 08 May, 2015, 07:08Be the first to give this comment the thumbs up 0 likes

Kevin, from what I read here I cannot see anything that is forced. It simply states merchants can now choose whether or not to accept cash. If they do not, it is their choice to go for interchange, probably because the cost is less than the advantages of not having cash.


Or am I missing something here?

Stanley Epstein
Stanley Epstein - Citadel Advantage Group - Modiin 08 May, 2015, 07:36Be the first to give this comment the thumbs up 0 likes

Of course the consumer still has a choice…and that could be to take her or his cash elsewhere.

A Finextra member
A Finextra member 08 May, 2015, 08:101 like 1 like

The Danish development is already the case in Sweden sonce some years. the Swedish legislation does not contain any compulsion to accept cash from the general public for others than the government. And the government has long time ago closed down any possibilities to pay for instance taxes in cash. They only accept electronic payments... For the private sector it is free to accept or refuse and many stores in Sweden do not accept cash but only debit or credit cards. If you come to Sweden and want to buy a mobile phone over the countermost sales locations only sell for electronic payments. Some  stores do not accept cash after 6 pm and the meergency hospitals only accept electronic payments: cards, realtime money transfer Swish, internet/mobile bank transfer... Most taxis do not want to have cash. In public transports you cannot pay cash since many years to a bus driver... for work safety reasons. And nobody died in Sweden due to cashless merchants. It is up to the merchant himself to decide if he would like to accept cash and its associated security routines for staff, funds and thereby high management costs. Cash is of course the legal tender backed up by the government and there to be used, but you need a debot card to get cash from atms since most bank branches today are cash free: no deposits, no payments, no withdrawals over the counter. Today 85% of everything sold in stores in sweden is paud for by a general purpose debit or credit card. Kids from 7 years up hold debit cards and all the adults have one. It is difficult to find a store that does not accept cash or Swish real time transfer but only cash. Most customers would be suspicious to the motive of the merchant to take only cash...

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 08 May, 2015, 17:081 like 1 like

Cash is legal tender. Merchants who chose to decline cash are, in effect, spitting in the face of their nation's central bank. That they're given special dispensation by their own government is minor consolation. Anyway, it's early days: The dispensation is yet to become law and let's see how many merchants actually opt to use it. In any case, customers always have the choice to take their cash to other merchants who opt not to use the dispensation.

Jacob Christiansen
Jacob Christiansen - Advantage FSE - Guildford 09 May, 2015, 10:01Be the first to give this comment the thumbs up 0 likes

It is a great and evolutionary move. Cash is expensesive and inconvenient for all involved. With proper regulations, value chain cooperation and consumer protection in place, it can work. 

I am sure there likewise was great resistence when we first moved away from bartering and introduced cash......

I wonder if the governement will also be the first to introduce national use of blockchain technologies?


A Finextra member
A Finextra member 10 May, 2015, 19:57Be the first to give this comment the thumbs up 0 likes

Several comments see this as a bad thing, the only comment in favour is from the region (thanks Jan Olof).

The Nordics have been ahead of everywhere else in adoption of electronic payments for many years - look back at McKinsey and Boston Consulting payments papers, or the World Payments report.

Having spent quite some time in the region recently, I am sure we're seeing natural progress, probably in part due to mass adoption of smartphones, not an anomaly.

Arjeh Van Oijen
Arjeh Van Oijen - Icon Solutions - Amsterdam 11 May, 2015, 12:56Be the first to give this comment the thumbs up 0 likes

@Kevin. This depends on the situation in a specific country. In the Netherlands (from a payments perspective comparable with Denmark), debit card fees to be paid by merchants are lower than the fees to collect and deposit cash (not mentioning the time it takes of the merchant to collect/deliver cash and the security risks of holding cash). Following your arguments, merchants in countries like the Netherlands and Denmark should be able to refuse cash on the customer's behalf (otherwise the customer is going to pay for the relatively expensive cash handling fees of the bank).

Having said this, I'm aware that my argument does not apply for other countries where the situation around banking fees for different payment instruments differs. I'm convinced that in the future, due to the decline of electronic payment fees, more countries will get in the same situation as the Netherlands and Denmark.