Cashless society: How Danske Bank's deal with PowaTag could promote mobile payments worldwide

By touching a card on a machine without even inserting it, the smallest transfers can be made nowadays. Even an 80p bag of crisps can be bought via the Amazon mobile app.

We are slowly moving away from falling coins and wrinkled £5 notes. In many countries, it is the bank card that is taking over from cash, but the rise of mobile payments is a huge player in the developments towards a cashless world.

The Nordic countries are the frontrunners in the trip away from cash. Finland, Sweden and Denmark have the highest non-cash payment rates in the EU.

Denmark's largest bank, Danske Bank, now has a free app called MobilePay that has over 2.2 million users, almost half of the country's population and over two thirds of smartphone owners in the country.

MobilePay has teamed up with Powa Technologies, founded by Dan Wagner, which provides mobile payment technologies on a global scale.

PowaTag's global reach means the deal could fuel a huge jump for developments towards a cashless society on a larger scale. In many Scandinavian countries, cash is becoming more and more redundant.

Wagner told IBTimes UK that the idea of mobile payment fit in very well with Denmark's progressive view on payment methods.

"There's been a sort of immediate adoption of new methods in Denmark, which I don't think is likely to happen in the UK or the US, but I think the world is moving away from cash. Cash is not a very effective method of payment, you know, it's clumsy."

The UK consumer seems to agree with Wagner. Only 52% of UK consumer payments were made in cash in 2014, a report by the Payment Council published on 21 May showed. The Council also said it expects non-cash payments to take over as the most popular form in 2016.

In the UK, the still increasingly popular debit card seems to be the main rival of cash payments, but as MobilePay is hugely popular in Denmark and payment app Swish is taking over Sweden, mobile transfers are slowly taking over.

Mark Wraa-Hansen, head of the MobilePay division at Danske Bank, said that Nordic societies adapted to mobile payments easily and he expects the same to happen worldwide.

"On a global scale you see this big trend towards mobile payments but I think Denmark and perhaps the Nordics have been very adoptive of cards especially and I think the same goes for mobile payments," the Danish businessman said.

Wraa-Hansen said that most people like mobile payment methods simply because of their practicality.

"Just think, if you leave your home without your wallet there are times you don't turn around, but if you forget your phone, you will go back to get it. People cannot live without their phones."

MobilePay started out as an individual transaction method between individuals. It saved people from the hassle of security keys and card numbers and it was embraced by the Danish people.

"We have all been in the situation where you want to give a gift to mum together or you want to split a restaurant bill between multiple people," Wraa-Hansen said. "These are scenarios out there that, when you think about it, in the past, were very complex in terms of paying for stuff together."

In the beginning of May, the Danish government proposed a law that would stop shops from being legally required to accept cash payments. In order to cut retail costs, the government wants to give retail and grocery stores the possibility to refuse cash payments.

Not only consumers are happy with the move from cash, businesses have quickly adapted to the changes as well.

"I think businesses are already taking steps towards ecommerce − they want to engage with consumers in a better way," Wagner said.

In terms of security and costs, Wraa-Hansen argued that having no physical cash in retail places can be very useful.

"If you have a lot of cash around there is a lot of hassle from a business perspective − there are a lot of risks and it is very complex in terms of collecting and delivering cash, bringing it out to banks," he explained.

Both executives agreed that cash will still be around for quite some time, but the visible global shift towards non-cash methods is definitely one to keep an eye on.