Scandinavia’s last mint will have closed by the end of this month.

Denmark has decided to outsource the production of its coins to Finland following in the footsteps of Sweden and Norway.

Printing of banknotes has already been stopped by the Danish central bank. There’s no rush to find a subcontractor for those as they’ve become so unfashionable.

Authorities are falling out of love with cash, particularly the kind of high-denomination banknotes favored by mobsters and drug dealers in diverse countries ranging from the European Central Bank to Venezuela to India.

Scandinavia is way ahead of the game. In the global transition to a post-cash society, the region is frequently cited as a trailblazer.

Reduction of tax evasion, a key ingredient for funding its generous welfare state, is helped by its preference for electronic payments.

One of the countries with the lowest percentage of notes and coins in circulation today is Denmark, along with neighboring Sweden. Responsible for 82 percent of Danish transactions were cash and checks as recently as 1991. While the use of cash has been dropping steadily ever, even during the current period of negative interest rates, the check went the way of the Dodo in late 1990s.

From 45 billion kroner ($6.3 billion) to 31 billion, the size of the country’s black economy has fallen by a third between 2012 and 2014, according to a March report by Denmark’s Tax Ministry.

And convenience is an equal reason to fight against crime behind the Nordics’ shift away from cash. The cost of handling cash is more than double that of handling domestic debit card payments, a June report by the Danish central bank found. Hardly any Danish shop prefers cash to plastic these days, the same report also found. A key reason for their preference is the fear of robbery.

Danske Bank’s MobilePay, an app which allows people to easily pay for purchases or send money to friends and family using their mobile phone is the newest form of electronic payment to have taken Denmark by storm.

MobilePay is the region’s runaway success even though a similar product exists in Sweden. It is already being used on a regular basis by more than half of Denmark’s population having launched in May 2013. When a bunch of regional banks joined the platform, Danske shares surged in November.

While the central bank has joined others in exploring virtual currencies based on blockchain-style technologies, the Danish government is now allowing some shops to refuse cash payments.

That carries its own set of risks, particularly when it comes to privacy.

A tabloid had for years paid a rogue consultant at digital payment provider NETS  to obtain copies of credit card transactions, scores of Danish royals and celebrities were shocked to discover in 2014.

Since they are able to see the advantages of living in a well-functioning society that keeps freeloaders and tax-evaders within tolerable levels, Scandinavians generally shrug off privacy concerns.

Whether bigger and less homogeneous societies like India’s can follow is another question.

(Adapted from Bloomberg)

Categories: Economy & Finance