Denmark shows us the mobile way

News arrives that our Scandinavian cousins are getting serious in the war on cash.

The Danish government has proposed getting rid of the obligation for selected retailers to accept payment in cash, moving the country closer to a “cashless” economy. Nearly a third of the Danish population uses MobilePay…

[From Denmark moves step closer to being a cashless country – Telegraph]

Actually half of the adult population of Denmark use MobilePay, the mobile-initiated account-to-account (mA2A) immediate payment services, the equivalent of Barclays’ PingIt, that is offered by Danske bank in Denmark. It was launched two years ago and has attracted more than two million users out of a population of 5.5 million which, when you look at the demographics, means that already has around two thirds of its total addressable market (i.e., Danish smartphone users aged 13 and up). Right now it is processing around 200,000 transactions per day with an average value of around €33.


The mobile phone provides a secure and convenient A2A initiator.

MobilePay has over 7000 merchants signed up and has an “small business acceptance” app in place so that merchants can accept electronic payments without a POS terminal. They charge merchants a flat 1% fee (with a maximum of five Danish Krone, or abut 50p) for payments and I’m told (by a very reliable source) that the fraud levels through this channel are significantly lower than they are on cards. They are now extending the app to provide a contactless NFC and Bluetooth option for point of sale. What interests me most about their roadmap is that they have a very good API and are now trialling it with some merchants because, as we all know, merchants want on their own apps to deliver the best customer service and the future is “app and pay”. I saw a very good example of this using a Copenhagen coffee shop app.

Direct A2A payments from inside merchant apps look set to grow.

In the UK, we have two mA2A mobile-centric front ends to the faster payments service (FPS). These are the aforementioned PingIt, offered by Barclays, and Paym, offered by everyone else. Paym has around two million people registered and transferred around £26m in 2014, We happen to be a Barclays-centric household, so I use PingIt all the time and find it very convenient. Therefore I was very excited that they decided to extend their addressing from mobile phone numbers to Twitter names!

Barclays has declared on 25 February that it will be the first British bank to allow people to pay each other and small business through their Twitter handles from 10 March.

[From Barclays uses Pingit to become first UK bank to process Twitter payments – Real Business]

If you want to try this out for yourself by supporting a good cause, by the way, then simply fire up the PingIt app on your mobile phone, select a modest amount for test purposes (say, £250) and send it to @dgwbirch. I will let you know as soon as your payments reaches the Dave Birch Holiday Home in the South of France Emergency Appeal Fund. Both PingIt and Paym are a long way from being used by half the adult population of the UK and edging cash out of the way for the person in the street but, back across the North Sea, Mobile Pay is playing a key role is edging Denmark closer to cashlessness.

The Danish government said as of next year, businesses such as clothing retailers, petrol stations and restaurants should no longer be legally-bound to accept cash. The proposal is part of a pre-election package of economic growth measures aimed at reducing costs and increasing productivity for businesses.

[From Denmark moves step closer to being a cashless country – Telegraph]

They are doing this because to try to get the total cost of the payment system in Denmark down to the lower levels that are seen in, for example, Finland and Norway.

if you include household costs, the total social cost of payments in Denmark is calculated at 0.55% of GDP, of which 0.35% is attributed to cash and 0.15% to the domestic PIN debit scheme.

[From I trashed my cash]

The context here is specific to Denmark. In common law countries (e.g., the UK and the USA) there is no requirement for retailers to accept any form of payment at all, cash included. It’s a misunderstand of what “legal tender” means to imagine that they do. But in Denmark, the law says that certain types of retailer must accept cash and so the law is being changed so that they don’t have to.

Copenhagen Parade

The Danes are very welcoming to visiting consultants.

I think it is really interesting to see this approach to national payment strategy – that is, one based on productivity and economic efficiency – in contrast to the UK’s where the mere idea of ending cheque clearing in a decade was enough to induce apoplexy in the shires and a shake up of the UK payments industry governance.

Another report on falling cash usage in the UK

My son and I have been out and about, living the life of normal folk who don’t care about payments. We made a couple of cash payments and we made a couple of non-cash payments. We didn’t, however, make any chip and PIN or contactless or swipe payments.

The Halifax, part of the Lloyds Banking Group, just released some interesting figures about trends in customer use of payments. One of the more noticeable trends is the steady fall in the use of cash, a fact that was picked up on by a a number of news outlets.

“Cash withdrawals now account for just £18.33 of every £100 spent, a £1.82 decline since 2013.”

This got me on to BBC Wake Up To Money and subsequently a number of other BBC Radio interviews about the rise of electronic payments and the decline of cash. One of the questions I was asked was about places where you have to use cash. I couldn’t think of one off the top of my head. I was thinking of using the example of giving money to beggar in the street (which I never do, I but I’ve heard of the phenomenon), but then I remembered that beggars are ahead of this particular curve.

“A professional beggar who travels hundreds of miles from his home in Lancashire to London’s Mayfair has been using a credit card reader to accept payments from wealthy tourists. Damien Preston-Booth, 37, commutes from his rented home in the north-west, but pretends to be homeless when he asks passers-by for money on the streets of London. As well as taking cash from wealthy tourists in the exclusive Mayfair area, he also has a mobile card reader and accepts payments to his PayPal account.”

I think this is pretty forward-thinking of him, and despite the underhand nature of his enterprise, applaud his willingness to try exciting new forms of payments at the heart of Europe’s FinTech capital.

“The reader is linked by Bluetooth to his smartphone and the donor receives a receipt for the donation via email.”

If you want to donate to another worthy cause, the Dave Birch Holiday Home in the South of France Emergency Appeal, you can PingIt the money to @dgwbirch and I will, of course, be only to happy to e-mail you a receipt on request. But back to the point. Where do you have to use cash? On one of the shows (I apologise for forgetting which one) someone said that they had to pay cash at they local Chinese restaurant. This made me wonder: why do people go to cash-only restaurants? Apparently I’m not the only person that thinks about this.

“Either we didn’t know it was cash-only, and are now furious about this fact for all the reasons examined above; or we did know it was cash-only, and we chose it anyway because it made us feel bohemian, in-the-know, and capital-C Cool.”

Yeah, well. I don’t buy the hipster curve on this. If I am out for lunch and I see a restaurant with “cash only” in big letters on the door then I will walk straight past it. The only reason that I’ll go in is because they don’t tell you they are cash-only until it is too late. I have the same problem with taxis. I suddenly decide to hail a black because I’m in a street full of them and so can’t be bothered to use Hailo or Uber or whatever. So I put my arm out, the cab stops, I jump in and… I see a sign saying “cash only”.


At that point I should of course tell the driver to stop and let me out, but because I’m English I find it very difficult to do that and so instead sit fuming in the back until we approach my destination and then jump out to run to an ATM. It looks as if some other drivers recognise and anticipate that problem too, because it’s presumably a problem for them that the machines often have only £10 and £20 notes in them.


In a modern city such as London, this is unacceptable. Either ban taxis from cash-only operation or make them paint the cash-only taxis a different colour so that normal law-abiding citizens can avoid hailing them. Anyway: it’s a minor point. Hailo, Uber and whatever mean that none of us will be hailing taxis for very much longer and #appandpay will again triumph over #tapandpay. Meanwhile, still scratching my head about where I might last have used cash, I remembered my day out in Woking last week. I picked up my son from his friend’s house, where he regaled me with (quite unprompted) tales of his night out at Wagamama in Camberley, where he tried out their nearly new QKR! implementation. He loved it, and thought that the #appandpay convenience of the service was an absolute winner. Why wait for a server to come over to the table with a chip and PIN machine when you can just pay via the app and go?


He was telling me this as we were strolling down to check out Woking’s newest wargamesshop, the excellent “ibuywargames”. Having had a look around and decided to buy a couple of things, I noticed a PayPal chip and PIN reader in the store. I took this to mean that they would accept all forms of PayPal so, since I had my phone in my hand but my cards were in my wallet, we both fired up PayPal and I paid in-app. Another #appandpay triumph, but this time over #chipandpay. So, no need for cash there either.


But then I remembered: I did use cash after all that day. We stopped for a burrito at the truly fabulous Aracelis stall in the old Woking market. I was lured there by my son’s tales of their fantastic Mexican food. I am sorry to report that when I got there I found that they were cash-only, so I was about to walk away on principle but my son forced me to suppress my conscience and order. It was amazing. All they need is a contactless reader and I might never leave.


The point here is that one of the key reasons why cash is in decline for retail transactions (as I mentioned on several radio stations) is the rise of the mobile phone as a alternative not only to the card but also to the terminal. As has been observed here many times before, it is the mobile phone (rather than the plastic card) that it is leading down the road to cashlessness, and this is the point I wanted to reinforce. Oh, and that half of the payment experiences I’ve spoken about here were in-app.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

Another report on falling cash usage in the UK

Dgwb blog white border

My son and I have been out and about, living the life of normal folk who don’t care about payments. We made a couple of cash payments and we made a couple of non-cash payments. We didn’t, however, make any chip and PIN or contactless or swipe payments.

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