CASHLESS SOCIETY Portugal vs. Denmark

This week, the CEO of Mastercard Portugal, Paulo Raposo held their roundtable discussion about future payment trends.

The theme was the CASHLESS SOCIETY in Portugal vs Denmark and my input was based on the following notes:

In the 1980s the Nordic Council, which was established in Copenhagen in 1952 as an inter-parliamentary collaboration for Denmark, Finland, Iceland, Norway Sweden and their 3 autonomous areas, defined the aim to be a leading “cybernetic region”. Over the decades this evolved to the current ambition to be the globally leading Digital Societies, which includes the steps of no-paper-money to cashless aims in 2030.

The Nordic cash payments have been steadily declining since 1993, and since 2013 most Nordic bank branches and many shops do not accept cash for flexibility, efficiency, security and fiscal reasons, which however create general privacy and data security challenges plus user issues for minors, elderly and marginals without digital access.

Over the last decade, 50% of the Nordic cash was removed from circulation with 25% in the last two years alone and in 2016 the national banks even decided to terminate the money production.

In reality, the Nordic region has been close to paper money-less society after the 90% market penetration of the MobilePay app, so in 2017 less than 1% of payments were cash, bringing the cashless society close to a reality more than a decade ahead of time.

Portugal is also know as an early adopter of technology with SIBS’ extensive ATM distribution, clear design interface and extensive payment services leading the edge in the 1990s; also the simultaneous ViaVerde success is still today a global digital payment reference.

While Denmark and many other countries without a national payment institution lost 10 years of very expensive interbank competitions between various banks’ mobile solutions, Switzerland communicated the intention to create a globally leading fintech and blockchain legislation; this still may leave Portugal and SIBS with a clear opportunity to turn the missing mobile payment penetration into an advantage by adopting next generation blockchain technology for coin and peer2peer payments before anybody else and thus like in the 1990s again frog-leap a generation to be a global digital reference.