Will Coin Use Be Eliminated Quicker than We Think?

Only computer digits and paper remain as worthless substitutes as "money".

Posted on October 19, 2012 by Dave Harper
 

The fate of the vending machine industry and coins have been intertwined for my entire time in the hobby.

What the vending machine industry wants, it gets. The fate of all coins basically rests with it.


What if the time is about to come when it doesn’t want coins at all no matter what the composition, weight or diameter? What if coins no longer loom large for their business?

What if the costs of processing them look like a fat target to be eliminated to improve their business?

While collectors await the Mint’s report to the Congress due Dec. 16 about the future of the cent and the nickel and other related coinage matters, time continues to march on. Could Congress have been secretly hoping that progress in electronic payments would be so rapid that it would not have to deal with the emotional issue of abolitioning the cent at all? Just point the finger at the vending machine industry and Silicon Valley and say the cent passed as the result of progress, as did the nickel, dime, quarter, half dollar and dollar.

Making payments by cell phone have been in the headlines this year. Vending machines that accept only cell phone payment could be on their way, or machines that accept phones as well as credit or debit cards, like a gasoline pump.

No coins would be involved.

If that becomes the case, the vending machine industry wouldn’t care if coins were made of cardboard.

As a practical matter, they already don’t care about cents or half dollars except as coins that the use of which might jam their mechanisms.

Few average people head to a vending machine with coins jingling in their pockets. They have paper money. They expect to be able to use notes in vending machines, or exchange them for coins in a machine that the vending company supplies for that purpose.

Most users of vending machines, myself included, simply head home with the change. I then take it to the bank to exchange for paper money after the coin container reaches a certain point of comfortable fullness.

How would I react to payments by cell phone? I don’t know. I expect I would look at ease of use and whether there were some sort of charge for the transaction being conducted in that manner.

Neither point seems like a high hurdle to overcome.

I have long said that coins will be used for my lifetime, but I might have to re-evaluate that. It depends on slower progress in electronic payments and a greater willingness by Americans to use higher denomination coins. The latter has proven not to be the case. Congress is not inclined to force the issue.

The upshot is this refusal to use the dollar coin might just speed electronic payments along at a rate that will take out all coins far faster than what might have been the case otherwise.
Europe is still inclined to use coins and has a $2.60 coin in the form of the 2 euro. We are not Europeans. We might not have coins much longer.

Related: Cent, Nickel, and $1 Coins Chart Uncertain Future
Source:  Can coin use be eliminated quicker? | Numismatic News