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Will Coins and Bills Eventually Disappear to be Replaced With an Electronic Wallet?

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In Canada it is taken for granted that we can use our ATM/ABM (Automated Teller Machines – Automated Bank Machines) cards to buy gas, food at groceries, restaurants, liquor stores and elsewhere. Most places of business accept direct debit card transactions. Some places do pose a $5.00 minimum but that is a small price to pay for added convenience. Sure most countries accept credit cards for the same type of purchases but not always a debit card. Even in the United States, many states lack the acceptance of debit cards unless it is a debit card and credit card combination like a Mastercard debit card. These cards are not the same since you still need to top up the Mastercard debit card when the funds run low on the card.

In most Canadian cities, you have ATM/ABM machines in banks open 24/7, in convenience stores, bars and even ATM/ABM only locations. Some cities even have ATM/ABM drive thru. The only convenience area that still lacks the use of an ATM/ABM card is on vending machines. Some do exist but not a common sight yet. To carry cash or go to a bank to withdraw cash first before shopping is nolonger a neccessity. Many major retailers and businesses also allow a CASH BACK transaction with the purchase. This makes it truly convenient when you are strapped for time.

Non Canadians may see debit cards as a security risk and prone to unauthorized transactions. This is certainly an issue but recently our Canadian banks have moved forward in adding a Smart Card CHIP to the debit cards which adds another layer of security on top of the PIN number that users must enter when doing transactions.

Recently a familiy member went back to Japan for a vacation. I was completely surprised to hear that Japan is still a cash society and do not use debit cards. ATM/ABM machines are almost non-existent and hard to locate. Businesses accept credit cards only as an option to paying cash. I would have thought Japan would be a leader in electronic transactions but it is not the case. Revolutionary hi-tech designs are conceived regularly in Japan and used world wide but much of the Japanese culture relies on the preservation of its ancient history and culture. Therefore the use of money is still very important since it is tied to the past and also associated in a religious context. Japan is a cash based society still and will most likely be one for decades to come.

Other countries that still hold on to traditional values would be in a similar situation. The introduction of electronic funds would be an arduous process if individuals prefer to keep their money safely at home instead of in a traditional bank. It’s not about the acceptance of the electronics or hi-tech process but the value and importance placed on the actual physical money. Wealth in some societies is measured by the weight of the currency one posesses. Electronic funds do not have a physical weight that can be placed on an old fashion scale. History has recorded instances of many societies that weighed their money instead of counting it.

Will coins and bills eventually diasappear?

The reason for asking this question is based on an article I had just read on the New York Times website.

I am sure that physical currency will disappear eventually but not anytime soon. Maybe 100 – 150 years down the road I would guess. The significance of currency in its physical form is held dearly by many in the professional and religious circles. Until Sunday church offerings are only accepted through a handheld electronic processing device, we will still require the use of coins and bills in churches. Money in its physical form will still be regarded as a true form of monetary transfer for decades to come.

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Discussion

3 comments for “Will Coins and Bills Eventually Disappear to be Replaced With an Electronic Wallet?”

  1. Added Note:

    I have used the PayPal service for years and PayPal as a company is still very strong and a well established online electronic payment system. A couple of years ago PayPal did a test market of their PayPal Mastercard debit card. This did not seem to take off since PayPal no longer offers new cards to existing PayPal account users. This Mastercard debit card is very convenient but not as convenient as a true debit card linked to my bank account. Maybe PayPal should consider adding the Smart Card technology to the Mastercard debit card to enhance the security to make these cards more attactive to the American consumer. The wave of the future for many countries will be the ewallet and immediate cash transfers from the bank account will minimize the high cost of using credit cards.

    Posted by Bob Katayama | November 16, 2009, 1:11 pm
  2. Added Note2:

    For those not familar with the banking system in Canada, all banks charge a fee for using a particular bank account be it a checking or savings account. This nominal fee allows X number of transactions free per month. The ATM/ABM transactions are included in this total. As long as you stay within your alloted limit, there are no additional banking fees. Retailers do not charge any fee on top of your purchase for using an ATM/ABM card. Purchases are free of fees unlike a credit card which charges a high interest rate for balances carried over. Only time you would be charged $1.50 – $3.00 a transaction is when you use a bank machine that is not the same as the card issuing bank or a third party ATM/ABM machine not directly operated by a bank.

    Posted by Bob Katayama | November 16, 2009, 1:17 pm
  3. Added Note3:

    One reason that might pose a problem with ewallets is the electronic transaction trail that it leaves behind. Cash transactions leave no physical electronic or even in some cases a paper based trail. For this reason, many may still continue to use cash to avoid the adiitonal fees or taxes imposed on their transactions.

    Posted by Bob Katayama | November 16, 2009, 1:26 pm

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