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

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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?