Some recent policy from our neighbors to the North came into effect at the beginning of February where the rounding of cash transactions moves to the nearest nickel as part of Canada’s Economic Action Plan 2012.

It appears that the cost of penny production over the actual worth has finally taken root. Other factors like the environmental benefits of and the cost of transacting have also played a role in the demise of Canada’s smallest denomination. While this policy strictly affects cash transactions, banks, business, and consumers can still expect credit, debit, or check transactions to not be affected. While there is no particular way that businesses have to conduct business regarding the pennies, it has to be done in a clear and transparent manner. The Canadian government has outlined a practice that businesses can follow where if the transaction ends in 1,2,6, or 7, the total is rounded down to the nearest nickle while if ending in 3,4,8, or 9, the transaction is rounded up.

This is going to be both a simple and complex issue with software makers. Simple because a ‘clear and transparent’ manner with the outlined suggestion on rounding appears to be very straightforward. However, without a specific law stating how the policy is to be set, software makers are stuck not knowing how to program their software in a manner that protects them from having to code their applications multiple times.

The urgency to get something in place as part of their software is high as the penny deadline has already passed in Canada. However, it appears that the US is starting to think about following suit. In a recent Google+ hangout, the question was posed to President Obama about why other major nations had gotten rid of their pennies and the US hasn’t, especially since there are such cost saving reasons to. President Obama responded, “Anytime we’re spending money on something that people don’t actually use, that’s an example of things that we should probably change.” But he later goes on to indicate that Washington has bigger fish to fry.

Either way, international software makers should be preparing to add functionality, hopefully dynamically, to accommodate the changing cash environments if they hope to keep up on the current monetary trends.

Sources:

http://www.fin.gc.ca/1cent/toolkit-boite-a-outils-eng.asp
http://firstread.nbcnews.com/_news/2013/02/19/17019470-penny-pinching-can-obama-manage-elimination-of-one-cent-coin?lite