Sweden's Journey Toward the World's First Cashless Economy

Susan Fourtané, Journalist, Writer | 5/30/2012 | 44 comments

Susan Fourtané
Let me introduce you to the Swedish banknotes. In the near future, they will be part of the history of Sweden. The country is quickly moving toward being the world’s first cashless society by integrating IT and communications technology.

Back in 1661, Sweden was the first European country to introduce banknotes. Now the Scandinavian nation is the first willing to get rid of them.

The Swedish pop group ABBA made millions singing "Money, Money, Money" to the world in 1976. A little more than 30 years later, to reduce crime and bank robberies, Sweden started to consider the possibility of becoming a cashless nation. In March, Sweden announced that its economy is on the cashless path. With this announcement, it is leading the world to a future where cash will be of value only for collectors.

Björn Ulvaeus, a former member of ABBA, became a strong supporter of a cashless economy after his son was robbed for the third time. “I can’t see why we should be printing bank notes at all anymore,” he told AP.

In Sweden, public buses don’t accept cash. You can buy prepaid tickets or pay your fare with a text message -- which is also how I purchase my transportation tickets in Finland. I see that nation following Sweden’s steps in favor of a cashless society. In Finland, I rarely need to use cash. In fact, I never carry it with me, since I have no need for it. A growing number of businesses only take card payments. Some bank offices have stopped handling cash altogether. In fact, more and more bank branches are disappearing, since there is no real use for having so many physical bank offices.

Even in houses of worship, you can find card readers to make it easier for worshippers to make donations. If it is that easy for churches, you can imagine retailers aren’t going to have any problem.

Eliminating cash would make the world more secure -- in a way. Thieves would have to find a different way to make a living. Sweden is seeing the results already. The number of bank robberies there fell from 110 in 2008 to 16 in 2011, the lowest total since Sweden started keeping records 30 years ago.

Some wonder what will happen with the homeless, drug dealers, and ladies of the night in a society with no cash. I believe they all will find their way to conduct their business or, in the best-case scenarios, make a career change.

Of course, there is always a real, serious downside: a potential increase in cybercrime. Also, everything would be tracked and controlled. Privacy would be nonexistent. (We are almost used to it already.) The more digital transactions rise, the greater the lure in putting a cyberhand in a digital cookie jar. According to the Swedish National Council for Crime Prevention, the number of registered computerized fraud cases (including skimming) climbed from 3,304 in 2000 to nearly 20,000 in 2011.

It’s not only in Europe where nations are sailing toward a cashless economy. Recently, Canada has moved closer to a cashless society. Can these nations on both sides of the world be wrong? I don’t think so.

The way we make our payments is changing. While governments, retailers, and financial institutions argue over how to split the transactional pie in some countries, Sweden is moving forward. Will your country -- or, more importantly, your economy -- be left behind?

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Technocrat   Sweden's Journey Toward the World's First Cashless Economy   6/6/2012 6:32:02 PM
Got Change ?
Hi Susan!  Nice article. While it does not surprise me that Sweden is moving towards a cashless society, since the Swiss tend to be a bit more advanced technologically than most would believe.  Many understand Sweden is a major European center for banking (especially those trying to hide their money from their local governments), but I would think most avant-garde concepts in banking/commerce in general would spring from the area. 

While I do have issues with the lack of privacy due to a complete electronic payment system.  Let's be real does anyone think we have any privacy anymore ?  So in that sense, the issue of privacy is a non-issue in my mind and as a result I am all for an eventual cashless society !   We are moving towards that now in the U.S. under the guise of saving trees, yeah right !   

On a side-note, living in Finland ?  Nice !  : )
Susan Fourtané   Sweden's Journey Toward the World's First Cashless Economy   6/4/2012 7:13:40 AM
Re: Indeed ....
Hi, Nemos 

When were you in Helsinki? Did you notice similarity with Sweden in the reduced use of cash? I am doing more cashless research in Sweden. :)

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vnewman   Sweden's Journey Toward the World's First Cashless Economy   6/4/2012 1:00:05 AM
Re: effect on disaster recovery
"That's because even today there are so many people in America who believe in Personal Privacy and the Anonymity+Freedom that Cash provides them today."

The number of people who work "under the table" in the US for tax purposes would single-handedly stop this and along those lines - it may solve the immigration issue - you can't be an illegal alien and get paid on the up-and-up.
Nemos   Sweden's Journey Toward the World's First Cashless Economy   6/2/2012 4:22:25 PM
Re: Indeed ....
No I haven't visited Norway yet I want so much to go. However, I have visited Helsinki, but I can't say much because I was there only for a couple of days.
Susan Fourtané   Sweden's Journey Toward the World's First Cashless Economy   6/2/2012 1:14:23 PM
Re: Reducing Crime
Hi, Taimoor 

Cybercrime is going the replace crime as we know it. At the moment, we have both, right? Eliminating normal crime then the governments only needs to deal with cybercrime. 


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Susan Fourtané   Sweden's Journey Toward the World's First Cashless Economy   6/2/2012 1:06:48 PM
Re: Indeed ....
Hi, Nemos. Thanks. 

Did you spend some time in Norway, too, or just in Sweden? Other than for safety, it's also that when you get to a point that most people don't really use cash it makes sense to prepare the nation to go cashless. I mentioned I never use cash in Finland, and I know a lot of people who do the same. Even if you have to pay 0,20€ you pay by card. 

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Susan Fourtané   Sweden's Journey Toward the World's First Cashless Economy   6/2/2012 12:53:37 PM
Re: Great way to stop fraud
DBK, thanks. 

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Susan Fourtané   Sweden's Journey Toward the World's First Cashless Economy   6/2/2012 12:49:17 PM
Re: Unbanked

There are many steps that a society has to cover and resolve way before thinking of going cashless. In a country where they have problems like the ones you mention, the government first has to find a solution for those issues. 

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Susan Fourtané   Sweden's Journey Toward the World's First Cashless Economy   6/2/2012 12:32:11 PM
Re: Not ready yet

"My expeirence in Europe is that they are a far less gratuity-oriented society. It probably isn't so bad there. But really, until we solve this problem, lazy fols like me would rather reach into their pocket and try to look as cool as possible handing over a folded bill to the person providing a service. "

You have said it. In Europe the tipping ettiquete is completely different, and again I have mention that is also different between the north and the south. In the north is almost inexistent, so there, no problem there either. :) 

Yeah, in the U.S. you almost have to tip the person that gives you directions if you happen to be lost in New York. 

More and more I am convinced that a cashless economy will not be possible in the U.S. at least in the next couple of centuries. :/

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Susan Fourtané   Sweden's Journey Toward the World's First Cashless Economy   6/2/2012 12:18:20 PM
Re: effect on disaster recovery

  "How does a cashless society handle disaster preparedness/recovery?"

There are not hurracanes in Sweden, so I suppose they haven't consider this as a problem. Sweden has studied this carefully before aanouncing its going cashless. Tsunamis, hurracanes, tornados, earthquakes, etc don't happen in this part of the world, so there is no need to be prepared for them. 

Of course in other countries where natural disasters are a problem they should evaluate this, among other local problems, before thinking of going cashless. The country needs to be ready for this; Sweden is ready. 

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