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Going cashless: the heat is on

It seems that Canada’s revamped polymer currency isn’t quite holding up the way they hoped. Recent reports say the money has been melting when placed too close to a heater or when left in a hot car. Not a problem they thought they’d have in the Canadian climate, I’m sure.

Late last year, Canada announced it was exchanging paper currency for a new, more secure, more durable polymer currency, starting with $100 bills. These bills cost more to produce, but are supposed to last 2.5 times longer than traditional bills. Designed to minimize counterfeiting, the polymer bills were tested for durability, including going through the washer and dryer, but apparently are susceptible to extreme heat.

This begs the question: why bother trying to “improve” physical currency? No matter what it’s made of, the drawbacks are the same. It costs money to make money, to transport money, to protect money, etc. With the technology now available, couldn’t physical currency be virtually eliminated? 

Mobile banking and payments have the potential to not only change consumers’ daily lives, but also save governments money, reducing costs for producing and handling currency. As a society, eliminating cash can also reduce crime, making bank robberies a thing of the past and making it more difficult for black market activities to succeed. Not to mention the increased tax revenue from previously unreported income, such as when workers are paid cash “under the table.”

The move to mobile transactions is moving slowly at the moment, backed primarily by mobile phone manufacturers, network providers, and financial institutions, but with government support, we could see usage skyrocket. Do you think governments will see the value in promoting a cashless society anytime soon?