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I wrote about this in a blog post called "Cash for crime" some time ago: https://www.finextra.com/blogs/fullblog.aspx?blogid=3399. 

In the Nordic countries cheques have not been used in practice since the 80s (in Finland private cheques disappeared when a 8 cent charge was introduced for cheque forms in 1983). POS payments moved to debit cards. Finland and Denmark has traditionally had the lowest cash in circulation in relation to GDP. In Sweden there has been a movement towards not accepting cash in shops and public transport to improve security.

The first thing to do should be transparent pricing. Customers pay every cent also for paper statements - even if it is not charged visibly. My experience is that when customers see the cost - they take logical action - in their own interest.

The problem is often that consumer organizations too often oppose these "sticks" (should be called negative carrots instead...) - so they act very much against the true interest of the consumer - and in this case also against reducing CO2 - in the case of paper invoicing the latest study end up at some 8m tons a year in EU...

Not so much subsidies needed - better to encourage transparent charging - common in the Nordics already to add cost of paper invoices to the invoice. Also just - those who use e-invoicing should not pay for more expensive behavior of others.

Same logic was used in bank branches already in the 80s when e-banking was introduced.

Nothing works like "negative carrots"

Amazing that figures are still so low. In Finland 4,9m out of a total population of 5,4m have an e-banking contract (and pay for it once over 25). Virtually all sorts of banking can be done online (including signing loan agreements with the log-in codes) and the same codes can also be used when strong  e-id (onetime code) is needed for logging in th other services - especially in the public sector.

I am - as a user of the Nordea mobile two-way messaging - "Your e-bill - press "a" for payment on due date".. a big believer in notifications becoming the way into mobile banking

Thanks John,

Banks in the Nordics have learned some lessons in the past and quite systematically stress-tested lenders capability to pay higher interest rates - which invariably will come. I do hope this goes for most regions - but occasionally the fierce competition may lead to too much erosion both of margins and quality. 

If the developing countries are allowed to continue to eliminate inflation with more cheap labour there will of course be less need for higher interest rates.

But then there is this other side - how much manufacturing should we really export. The quarterly capitalism is such turbo here - and short term gains can often be long term damage. At least Andy Grove thinks so: 

http://www.bloomberg.com/news/2010-07-01/how-to-make-an-american-job-before-it-s-too-late-andy-grove.html

Thank you Mathew,

Comments:  

Mathew: "Some small steps are already being taken towards this vision.  For years, proprietary fuel card networks have been stripping out VAT and providing a monthly consolidated statement for end-customers (some businesses conduct 1000s of fuel purchases each month).  The savings, through reduced admin and fraud prevention, are significant." The step to automate the VAT payment (assuming that the card payment picks up the VAT-info) should be short.

Mathew: "What is the next step?  Perhaps general acceptance commercial payment cards (e.g. procurement cards, T&E and small business cards) will begin to allow businesses to buy other products (besides fuel) in the same way.  The technical challenges have been identified and are being addressed." We have started a discussion to get card transactions integrated into accounting and VAT paid in the same way in real time as soon should be the case with e-invoicing.

Mathew: "In the short term, card-based solutions are quick to launch and scale internationally, and perhaps we should get commercial cards to do more to help with VAT." I agree - but it should be done in a unified way with other payments.

John,

I agree.

Banks bring in a mega class trust contribution also into this business. The Economy of Trust created by a combination of (i) anti-money- laundering legislation banks in particular have to live up to anyway, (ii) strong e-id tools, (iii) strong procedures when these tools are attached to citizens in private and enterprise roles, (iv) strong privacy requirements, (v) strong security, (vi) e-id as a services, (vii) PKI-usage in payment network etc etc

This all serves to make it clear that it certainly is in the interest of society at large that banks do join in more widely than presently and that all bankers should realise that it is not only a question of increasing revenue by creating new customer value - but also to take responsibility for more competitive national and single market economies.

But then it is important to proceed with work on a network that all service providers can join - subject to living up to sufficient trust when identifying customers and storing necessary material and logs. Banks have the unfortunate role of always be blamed - collectively - when a couple of them fail and in this network it would again be a piece of cake for media to put the blame on banks when a weak link fails - be it a bank or a non-bank service provider.

All in favour:

http://www.causes.com/causes/60512

That fact is a good reason to move more towards longer term and more-in-line with other industries incentives. 

But it is even more important to take the innovation leap on offer soonest.