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StreetSmarts

Pushback

Will we face an onslaught of real or threatened lawsuits
A small coin with a long history as we try to figure things out? When businesses begin to
round up, people will vent on social media. Some may
As the United States prepares to say goodbye to the even call their attorneys.
penny, it's worth pausing to remember just how long
this humble coin has traveled with us and how many Social media narratives will run the gamut from lectures
versions of it have existed around the world. about fair play to inflation anxiety to outright nostalgia.
Consumer advocates will take a stand for rounding down.
The word penny comes from the Old English penig, Others will draw historical parallels with Canada and
while pence emerged as its plural form. Over time, Australia, countries that have already retired their one-
pence also became the name for the lowest-denomina- cent coins.
tion coin in the British monetary system, where it still
exists today as part of the pound sterling. We'll see a fair share of emotion, resistance and
misinformation, which will make these videos fun to
Similar one-unit coins appeared across Europe for watch. I'm sure we'll be in for a barrel of lols.
centuries: the German pfennig, the French denier, and
the Scandinavian øre all served roughly the same Damage control
purpose: to serve as small, everyday money for ordi-
nary transactions. Business owners will have to wait until the government
makes a rule. It's anyone's guess how regulators will
In the United States, the penny has existed since structure the new rules for managing money. These days,
1793, evolving in material, size and symbolism. Once when I hand over cash, I am not always confident that the
made of nearly pure copper, it became zinc-based in clerk at the register will know how to make change.
the 1980s as metal costs rose. Despite its diminishing
purchasing power, the coin endured, partly because So many young people are unfamiliar with paper money;
of tradition and partly because rounding prices felt imagine their confusion when we ask them to round up
unsettling. to the nearest dollar. We'll need massive training and
outreach to educate the public when the new currency
Other countries have already made the leap. Canada regulations go into effect.
retired its penny in 2013, followed by Australia, New
Zealand and several European nations. In each case, Canada's rule is to round to the nearest nickel, so $9.98
transactions were rounded to the nearest small coin, becomes $10.00 and $9.97 becomes $9.95. That may sound
and fears of runaway inflation largely failed to ma- fair but it's kind of a coin toss: sometimes you win and
terialize. Sometimes consumers gained, sometimes sometimes you lose.
they lost, but commerce moved on. More than just a coin

Historically, small coins like the penny were essential What do we lose and what do we gain? This may seem
when wages were paid daily and goods were priced sentimental, but I think the absence of pennies may make
in fractions. Today, they're more symbolic than func- coin collecting less fun for children and numismatists. I
tional. Still, pennies have been a first encounter with also feel for the accountants, bookkeepers and CFOs who
money for generations of children, a starting point for will have to crunch the numbers. And let's not forget the
collectors and a quiet reminder that value once came consumers and business owners who will have to adapt to
in very small increments. the new normal.

As we let go of the penny, we're not just retiring a The penny may be small, but its removal forces the
coin; we're closing a chapter in the long, shared story payments industry to confront how change is introduced,
of everyday money. explained, and trusted at the checkout.

Want to know more? Keep reading The Green Sheet and
consider following me on LinkedIn, where we can share
never happen. Some considerations when designing ideas and support each other.
the new default are whether to round up or round
down, and whether to round up per transaction or
per basket. How many of these decisions will be Allen Kopelman, a serial entrepreneur, is co-founder and CEO of
merchant choice and how many will be regulatory Nationwide Payment Systems Inc. and host of B2B Vault: The Biz
mandate? to Biz podcast. Email him at allen@npsbank.com and connect on
LinkedIn https://www.linkedin.com/in/allenkopelman/ and
X @AllenKopelman.

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