You may have seen a recent news report that Sweden is rapidly going cashless. The article said that Sweden, which was the first European country (in 1661) to introduce bank notes, is now leading the way to their elimination.
Apparently, cards are being used for everything from rides on public buses to church donations---a pastor installed a card reader in his church when parishioners complained that they no longer carried cash.
The article reminded me of a few stories that I have been wanting to tell.
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A few years ago, Pat and I were staying with some friends in Larchmont NY, north of New York City.
Pat was going off one day 'antiquing' with her friend and I decided to play tourist in the City. At the commuter-line station I put a twenty dollar bill in a machine and out popped the $12 ticket. A few seconds later, 8 dollar coins rattled down into the 'change' tray.
I hadn't seen a US dollar coin before.
I checked over the Sacagawea dollars with the image of the native woman who acted as an interpreter for the Lewis and Clark expedition. After admiring the look and feel of
them, I stuck them in my pocket.
After lunch in a NYC cafe I decided to get rid of the coins, which were weighing down my pocket.
The cashier scowled when I pushed the coins toward her. And then, with a resigned look, took them and dropped them into a compartment at the back of the cash register tray. It was obvious that she wasn't going to be able to give them out in change---they would have to be handed into a bank. She wasn't pleased.
I wanted to say, 'Look, your commuter line gave them to me', but I didn't.
As I left the cafe, I thought about the American love for the one dollar bill---despite the way the bills bulk out one's wallet---and about the American dislike for the dollar coin.
Experts say that experience in Canada and other countries has shown that if a government wishes to replace a paper bill with a coin, it has to withdraw the bill at the same time as it issues the coin.
Apparently, we can't be given a choice, or we will stick with the old and familiar.
I have often wondered why the US Government ignored the experience of other countries and kept the dollar bill at the same time as it issued a dollar coin.
The answer seems to be 'politics'---what else is new!
In 2000 the US Government Accountability Office (the US's Auditor General) reported that complete elimination of the dollar bill would save $500 million a year. However, efforts to pass legislation killing the bill ran into opposition from two powerful Senators. Senator Trent Lott opposed it because his state of Mississippi produces much of the cotton that goes into the paper on which the dollar is printed. And, Ted Kennedy opposed it because the Crane Paper Co. in his state of Massachusetts produces the banknote paper for the dollar bill.
In addition, it seems that pressure came from the employees at the US plant that prints the paper dollar. They set up an organization, 'Save the Greenback', while other opponents of the elimination of the paper dollar bill set up an organization, 'Americans for George' (George Washington is, of course, on the bill).
It appears that many of the dollar coins produced today go to coin collectors, not into general circulation.
But a good number of the dollar coins go to El Salvador, Ecuador and Panama, all of which have adopted the US dollar as their official currency. The citizens of those emerging countries seem to prefer the coin to the dollar bill.
Go figure!
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Moving from cash to cards, a friend who spent his career in a large Canadian bank said it is estimated that the insertion of the 'chip' in credit and debit cards, along with the 4 digit PIN, has saved Canadian banks about $2 billion in fraudulent transactions!
The 'chip' has been adopted in Europe, and a good portion of Asia, Latin America and Africa but American financial institutions have been slow to adopt it. Some US travellers have found that their non-chip cards are no longer accepted abroad because the card reading machines will only handle cards with a chip.
One of the US financial institutions that has adopted the chip is the United Nations Federal Credit Union---its members, of course, do a great deal of international travelling.
Visa has said that it plans, in October this year (2012), to start offering incentives to encourage merchants to buy payment terminals that will accept cards with chips. The company hopes that this action will speed up adoption of the chip throughout the US.
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I am hoping that adoption of chip cards will eventually eliminate a growing aggravation at the gas pumps that faces us when we drive in the States.
As you probably know, more and more American gas stations require that a driver using a credit or debit card enter his/her zip code. I can understand that this additional bit of information probably reduces fraudulent transaction---for example from people using stolen cards.
But it plays hell with those of us who don't have a zip code.
A Globe and Mail article from November 25, 2011 sets out the problem well:
"The ZIP-code pump creates hassles for Canadians as it requires drivers to prepay, which makes it hard to accurately top up, and creates headaches trying to get a few dollars back if you overestimate. Canucks can prepay with cash, of course, but that means stuffing your wallet with greenbacks. Or you can leave a credit card with the attendant before filling up – but that's not ideal.
"Here are some suggestions from Hunter (editor's note: this is Dave Hunter, author of the popular Along Interstate 75) to game the system:
"If you're a twosome, send one person into the office while the other waits at the pump. Then text or radio your partner when the pump is ready to go. “Very often, just the presence of somebody in the store holding the credit card is enough to get the pump initiated,” says Hunter, who has led an uphill battle to find an easier solution.
"Get a U.S. debit card. Suitable for snowbirds or frequent cross-border travellers, gas money can be deposited in the U.S. account and if a minimum balance is maintained, transaction fees are limited. Hunter says that, in his experience, most pumps accept debit cards. (A Canadian debit card may work too, but could lead to some mighty bank fees.)
"Some suggest using the numbers from your postal code, plus 0s or 9s, in place of a ZIP code. This can be hit or miss, Hunter cautions."
During our recent trip to Florida we tried some of Dave's suggestions. They were all cumbersome and time consuming---don't get me started!
The proposal that one take out a US debit card sounds like a good idea but the phrase "most pumps accept debit cards" bothers me. Just what does 'most' mean?
I am sure that the day will come when we will insert a card with a chip in a Canadian or US gas pump, enter the PIN, and---'bob's-your-uncle'---we'll get gas.
Do I really expect to see that day in my driving-lifetime?
Not really!
(Pat, on the other hand, is sure that she will see this change during her driving-lifetime!)
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Cash became a problem in Russia in the mid-1990s because of hyperinflation. The value of the Ruble kept falling so that, for example, meals that used to cost a few Rubles were now shown in the thousands of Rubles.
After one of my first meals in Russia, I gave the server a few notes worth several thousand Rubles and received in change one or two smaller denomination bills, a few coins---and 6 cellophane-wrapped hard candies.
I said to my interpreter that giving candy after a meal was a pleasant gesture. He smiled and said that the candies were in fact part of my change, each of them was worth several Rubles, but there were no longer coins that small!
Russia tackled the Ruble devaluation problem on 1 January 1998, by moving the decimal point three places to the left. In this way, the Ruble was redenominated with one new Ruble equaling 1000 old Rubles. In other words, a meal that had cost 9,000 Rubles now cost 9.
I wonder sometimes as I look at the day's collections of pennies, nickels, dimes, quarters, loonies and toonies on the top of my bureau if we shouldn't bite the bullet and reform our coins. I still pick up coins on the street---because I think it is bad luck not to---but the rational part of me says that bending over for anything less than a quarter is not worth it.
In reality, pennies, nickels and dimes are like the Russian candies.
If I had more time and energy, I would start a campaign to abolish them.
Perhaps a reader will take up that challenge!
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See you on April 8, 2012 for Posting #142 with more stories from our family’s universe! If you have comments or suggestions, please leave a comment at the bottom of this posting, or email me at johnpathunter@gmail.com.
Note:
In Posting # 7 of The Icewine Guru, the Guru offer his views on the birth control furor in the US and whether it was 'an epic blunder' by Obama, or a clever trap set by him for the Republicans. Click on http://theicewineguru.blogspot.com/
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