Will Ireland be the latest country to eliminate low denomination coins?
Several countries across the world have implemented plans to rid their economies of low denomination coins. Canada is one of the latest such examples, after it moved to get rid of the penny and according to reports, Ireland may not be far behind. However, this doesn't mean consumers will stop all coin use and businesses won't need their coin counters in the future.
Ireland's Central Bank recently advised businesses throughout the country to begin rounding prices up or down in order to lessen the need for one- and two-cent coins. The country will undergo a trial period using this new system to see if it helps reduce demand for low denomination coins. This is only one component of a larger plan the bank has announced to save €1 billion annually. Other initiatives will include increasing the number of available €10 bills in ATMs, encouraging the most effective payment methods among businesses and consumers and educating the public about changing payment methods and options.
If the government's plan is a success, the country may see its one- and two-cent coins slowly phased out of circulation. The country would not be the first to eliminate such currency. Besides Canada, countries including Australia, Finland, New Zealand, Norway and Sweden have all made similar moves, according to The Associated Press.
One of the main factors in reducing low denomination coin use is the potential cost savings it can result in. Producing this currency often costs more than the coins themselves are worth. Before its elimination, each Canadian penny reportedly cost the government 1.6 cents to mint.
With these changes in mind, many have wondered about the fate of the U.S. penny. While efforts have been made to eliminate the coin, they haven't managed to get far in Congress. Because the penny doesn't appear to be on its way out any time soon, businesses should continue to operate as they always have, accepting all currency and investing in coin counting machines that will help them sort change and determine daily profits.
June 21, 2013