Irish Financial Review

Swedes steps up attacks on contactless threat

For many years, the Swedes were heralded as the masters of contactless payments adoption. And if you haven’t seen the most recent statistics, the whole of Sweden is fast becoming a nation where use of real money is becoming increasingly difficult.

Cashless, when controlled by secretive and privately owned non-EU firms represent a threat to EU citizens rights

Contactless payments is the broad description given to how people pay for goods and services. This can include the tap-and-go at a convenience store to pay for fuel, a litre of milk or a late night snack. It also includes online shopping, getting paid, paying for a taxi and so on.

The real measure of how contactless a society has become is how easy is it to travel and eat without having to use money. In Sweden, it is seamless, as long as you have a credit or debit card that is contactless-enabled. Here in Ireland, although very popular, contactless is far from as ubiquitous as it is for the Swedish. But signs are growing that things might be changing.

A key committee of Swedish lawmakers wants to force the country’s biggest banks to handle cash to halt the nation’s march toward complete cashlessness.

Parliament’s Riksbank committee, which is in the process of reviewing the central bank law, proposed making it mandatory for banks to offer cash withdrawals and handle daily cash receipts. The requirement would apply to all banks that provide checking accounts and have more than 70 billion kronor ($8 billion) in deposits from the Swedish public, according to a committee report.

The lawmakers said there needs to be “reasonable access to those services in all of Sweden,” and that 99 percent of Swedes should have a maximum distance of 25 kilometers to the nearest place where cash can be withdrawn. The requirement doesn’t state how banks should offer those services, and lenders can choose whether to use a third-party, machines or over-the-counter services.

Aside from some practical aspects of ensuring that all Swedish citizens are included in the economy, a backlash against cashless society is the likely result of other factors; the over-sized role of on non-state service providers.

Cash is a state property and it is the State, in all countries that underpin its value. Here in Ireland, that role is undertaken by the States that share the Euro and it is managed on a day-to-day basis by the European Central Bank. But is the State that guarantees the value and transportability of our common currency for the benefit of all citizens, not just a few or just those that have access to the latest phone technology or the fastest internet connections.

A recent systems failure at Visa underscores one aspect of the vulnerability of a key part of the cashless society, but there are many others. If we consider the rise in value and to some degree, popularity of crypto-currencies, such as Bitcoin, the value of such currencies is largely controlled by private investors. So, as a store of value, such currencies are finite and largely unreliable; bitcoin value has swung so much over the course of the last 7 months, it is now akin to Zimbabwean Dollars under the Mugabe regime. It is not a formula for long-term success, regardless of how much we may support the blockchain technology that underpins it.

And so, from a State and citizen security perspective, we cannot ever allow our currencies to be relegated to the same place as the horse-and-buggy. Instead, States must pass relevant laws that protect the use of cash as legal tender. Additionally, it would be sovereign suicide to hand over the role of currency guarantor to shady firms controlled and managed outside of the European Union. This lesson has been should have been learned from the shady practices of US firm Facebook as well as the anti-social network Twitter, another secretive US-based technology firm with global ambitions.




Irish adults that can’t add

A third of Irish adults struggle to work out how much change they should get in a shop and two-thirds cannot read a simple financial line graph, according to a leading financial skills study.

Financial education options available from, the financial education service

The study, from Cambridge University and University College London, which was published in March found “striking weaknesses” in adults’ financial literacy skills across many countries but adults here in Ireland fared especially poorly in all key categories.

Financial literacy is broadly defined as the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources. MoneyWhizz has identified six key financial pillars; Earning & Income, Credit & Debt, Saving & Spending, Protection, Investing and Financial Decision-making.

According to the UK report, researchers analysed more than 100,000 results from 16- to 65-year-olds from 31 countries (listed below) who had completed the Programme for International Assessment of Adult Competencies (PIAAC) test in 2011.

As part of this test, adults were asked four relatively simple money-related questions that could be expected as part of day-to-day living.

The UK researchers’ analysis of these results said: “A substantial number of people lack the basic skills that are needed to solve everyday financial tasks.”

The study, The financial skills of adults across the world, finds of adults across the 31 countries, Irish adults are especially poor:

  • About a third of Irish adults could not work out how much change they should receive from a shop when buying a handful of goods.
  • About four-in-ten adults here struggled to work out the price they had to pay for a product when they were given a per unit cost, for example per litre or per kilo.
  • Roughly two-thirds could not read a simple financial line graph – the type often used to convey key information about pensions, investments and the economy – this placed Ireland near the bottom of the global survey.
  • Most struggled to calculate discounts involving more complex calculations – in the example, the price of season tickets to sporting events.

Adults in Estonia, Finland and Japan performed well across all four tasks, those in Ireland, Turkey, Chile, Israel, Italy, Spain and England & Northern Ireland had among the weakest financial skills.

Examples of the sorts of questions asked

  1. If you bought four packs of tea: chamomile ($4.60), green ($4.15), black ($3.35) and lemon ($1.80) with a $20 note, how much change would you get?
  2. If a litre of cola costs $3.15, how much will you pay for a third of a litre?
  3. Explain the information presented in a simple financial line graph.
  4. If a football club offers the same discount for all season tickets – Main Stand – $50 for single entry, $300 for a season; Stand 2 – $35 for single entry, $210 for a season; Stand 3 – $25 for single entry, $150 for a season – what would the price be for a Stand 4 season ticket, where a single entry costs $21?

The answers are $6.10, $1.05 and $126 respectively.

With more and more Irish adults living longer, the long-term need to plan one’s financial well-being from an early age is more important than ever. This is due to the combined impact of changing employer pension arrangements which have shifted from so-called ‘final salary’ or Defined Benefit pensions to Defined Contribution pensions. Under the Defined Contribution pension option, all of the investment risk is shifted to the individual. Also, many states, including Ireland have increased the qualifying age for one to receive the State Contributory Pension by several years. This has resulted in loss of income for millions of future retirees.

Consumers today have far more financial responsibility for their long-term financial well-being. Yet, few have the necessary skills to make informed financial decisions. It is important that consumers  with relevant, meaningful and timely financial education on key concepts, including investing, time-value of money, compounding and tax-relief so they are better prepared for their future financial needs” said Mr. Frank Conway, Founder of MoneyWhizz, which works with primary and secondary schools as well as leading employers across Ireland in the delivery and development of personal financial skills.

The countries covered by the research paper are:

  • Turkey
  • Korea
  • Cyprus
  • Ireland
  • United States
  • France
  • Czech Republic
  • Finland
  • Slovakia
  • Chile
  • Estonia
  • New Zealand
  • Singapore
  • Slovenia
  • Belgium
  • Norway
  • Israel
  • Canada
  • England and Northern Ireland (counted as one for the report)
  • Poland
  • Germany
  • Italy
  • Lithuania
  • Austria
  • Greece
  • Russia

What a bunch of 10-year olds taught me about money

By Frank Conway

Yesterday was money day at one Dublin primary school.

Gathered were some 30 5th class students. All of them had been provided copies of the Talking Cents  (Edition 4) Money Magazine developed by MoneyWhizz and Bank of Ireland.

Edition 4 discussed a range of topics on the Cash V’s Cashless debate that adults work through on a day-by-day basis.

So, the students were asked to give their thoughts on their own preference on whether they preferred cash or cash-less when it came to receiving money, saving money and spending money.

Overall, the preference was for cashless by about a margin of 2:1.

While talking with the students, it was clear that all had read Talking Cents Edition 4 but their personal take was very interesting. So, when it came to group discussions, all of the students were eager beavers to tell me why they preferred cashless:

“It’s far easier” said one.

“It’s quicker” said another.

“You won’t have so much change and it’s cleaner” said a third.

But it was the reaction of a fourth that was really captivating

“Some shops can’t take cashless so you’ll need cash” was her observation.

She was spot on. Some shops, or merchants don’t have the card-reader technology necessary to read contactless cards. It was a moment of clarity for me personally. A 10-year old got it. They got the paying thing and they knew where roadblocks exist from just observing their parents or even from their own experiences.

On a range of other topics, this class of 10-year olds exhibited a very strong wish to learn and peppered me with some really interesting questions, including:

“How does and employer pay your money into the right bank account?”

“Can an employer take money out of your bank account if they have your bank account details?”

“Does that money belong to the bank?”

And when it came to a class challenge that involved identifying a selection of currencies from various countries, while most of the kids got the answers right, one made a very astute observation:

“Why do so many currencies have men on them?” – it was the question of the day!

My aim for the class visit was to teach a group of 10-year old students about money.

I came away having learned a lot myself; kids are smart, they want to learn and when they are engaged in a relevant way, they want to learn.

Frank Conway is a Qualified Financial Adviser and Founder of MoneyWhizz, the financial education service. 


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