Up front: I am not making fun of a respectable organization or any of its members, and please forgive me for singling you out. But when reading a recent announcement of a conference of the 27th (I had to translate that, they are using Roman numerals – good thing I read Asterix in my youth) Mint Director’s conference in Vienna next year I stumbled on this statement:
“Coins have been with us for over two and a half millennia – they are not about to disappear!”
Statements containing absolutes are per se suspicious. A statement like this for a conference titled “Tradition meets Innovation” justifies at least one raised eyebrow. The reality – and not only in the USA – is that coins as an everyday means of payment are a dying species. Credit and debit cards are in the hands of everyone these days, more and more people use them even for small purchases like soda or candy, and Google is testing a new global micro-payment method relying entirely on your mobile telephone. I, for example, don’t carry any coins except for a couple of Quarters, and solely to stop cashiers from handing me exorbitant amounts of change when paying cash (using bills) on occasion. Many people I watch when bored in supermarket check-out lines do not have wallets. They carry bill folds, a credit card or two, and perhaps some lose change in their pockets. (Which is why you frequently find coins on the floor). My own son hates coins, or any cash for that matter, and pays just about anything with his debit card. Is this just a subjective observation, or is it a trend?
In 2006, five years ago, the U.S. Mint wrote this in their Annual Report:
“Over the past five years, the public’s use of credit and debit cards, ePurses, stored value cards (like phone cards), contactless transaction cards (like EZPass and SpeedPass), and other forms of electronic transactions has increased substantially. This transformation of the economy toward more cash-free transactions might have significant implications for the nation’s demand for circulating coins in the future.”
Statistics of U.S. Coin production confirm that the anticipated new coin circulation will decrease by about 75% from 2010 to 2011. The government is likely to be happy about this as raw material prices are more and more making coin production an unprofitable enterprise. Coins will soon be a boutique /collectors item; even if inflation hits and people rush even more into gold as a safe haven we are not likely to take gold coins to the convenience store. Gold may be good as a stable long term financial reserve but it is neither safe nor convenient to carry.
So where does this leave the coin producing industry? Time to think about some cool new products? How about a high-tech coin that does not only contain a smart chip but also checks my finger print, or connects with a security device in my phone? Time to think about new applications for coins outside the world of payments and collectors? Time to go out of business?
It’s definitely a time for transformation – the world of coins started changing at least 10 years ago and it will not wait for the coin industry to catch up. It is definitely time to think of some radically new business models, it’s time to reconnect with markets, and time to innovate! The future will be exciting if YOU mint it.