Coins and Payments

In the course of a normal week, I tend to pay for purchases by giving people paper money, and they give me change by handing me coins. I end up with a pile of coins, including tons of pennies, which end up in my coin jar. Similar things are happening all across the American economy, with the result that the state keeps having to produce penny coins, which quickly drop out of circulation and end up in penny jars.

In the Netherlands, they solved a similar situation by eliminating the smallest coin. If a similar system were to exist in the USA, it would look like this: all charges, bills, tickets, etc would still be reckoned in cents (that is, accurate to the penny). If you paid the bill by check, debit card, electronic payment, you would pay the indicated amount. But if you paid in cash, you would pay the amount rounded to the nickel. Pennies would disappear from the coin mix.

This aspect of the system in the Netherlands was liked by buyers and sellers alike, as it saved much time and hassle.  It became moot with the introduction of Euro-based currency in 2002.

I’m rather intrigued with situations where the logic of the whole is so different from the logic of the parts: in the US, it appears that nobody wants pennies, and it is precisely because of this that the state is forced to produce more and more pennies (and currently at a price that exceeds $0.01 to boot!)  Maybe a century from now, kids will be surprised to learn in school that long ago people carried around awkward little things called coins and that even rich people might be frantically searching their pockets for something called “exact change” in a variety of situations where payment was due.

Until then, the various systems of coins give us plenty of interesting material for mathematics and puzzles.

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