# Get rid of pennies.[From Economic Logic: Change I can believe in]
# Replace the dollar bills by dollar coins.
Hear, hear. I cannot understand the attachment to the dollar bill, even taking on board the inherent conservatism of people towards money. My American wife, who suffers taxation without representation here in the Mother Country, tells me that the issue is psychological. A dollar coin would make people feel that a dollar isn’t worth very much any more. Which it isn’t: it’s worth literally a fraction of what it was worth when it was first issued as a note.
One group that used to be enthusiastic about the potential for a dollar coin was transit operators. I can remember from my days commuting on BART what a total pain it was to have to keep a selection of pristine, ironed and perfect dollar bills to use on the subway. A dollar coin would have been great.
The cost to process one thousand dollars worth of one dollar bills at SEPTA is approximately $10.11. The cost to process the same amount in coins is $1.22. The reason for the large difference is that handling paper currency is more labor-intensive.[From United States $1 Coin Act of 1997 – Wikipedia, the free encyclopedia]
But surely technology has overtaken the debate. Transit operators are converting to contactless smart tickets (like Oyster in London) and in the not-too-distant future you’ll just be using your phone or your MasterCard anyway. A key reason for this is that some transit operators have already recognised that the payment industry is finally starting to produce products that are fit for purpose in their domain. Someone who really knows his stuff is Sashi Verma, the head of fares and ticketing at Transport for London, and as he puts it
“We had to invent tickets because the financial services industry would not provide us with a product… That is now changing.”[From Tickets old hat, says British expert – New Zealand’s source for technology news on Stuff.co.nz]
Both Visa and MasterCard are working hard to make their contactless offerings desirable in the sub-500ms transit environment and I expect this to have useful spin-offs in other environments (eg, vending machines) where quick and convenient cash replacement would be welcomed by the cash-using general public. In fact, it’s something of a priority for them at the moment: as Payments News has noted, the number of transit-related announcements from Cartes seems to overrun even the mobile payments hype for the time being.
Today seems to be the day for contactless transit payments – apparently the new “killer app” for contactless[From Payments News: MasterCard, RATP Testing PayPass Contactless in Paris – November 04, 2008]
It looks as $1 coin has been permanently sidelined by the $1 contactless chip.
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]
“# Get rid of pennies.”
Who is on the penny? Where is he from? Where is our new President Elect from?
My point is – the penny is going nowhere in the short term…
Your post about the penny is logical and reasonable. Penny could be dispensed with in the name of efficiency…
Then I read the earlier comment about who is on the penny. With such a context, the penny is no longer some abstract thing but a token that reminds about a leader, his contributions…
I agree with the comment that the penny is not going anywhere!
It costs the U.S. Mint approximately 1.7 cents to make a penny. Perhaps instead of abolishing pennies, they should start charging two cents for them.