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| Bjorn Ulvaeus, a former member of the Swedish pop group Abba, whose latest entrepreneurial venture is a restaurant inspired by his musical “Mamma Mia!,” said that the group’s business empire has “made a statement” by declining to accept cash. “I haven’t used cash in at least eight years,” he said. “It’s so out of date.” |
Few places are tilting toward a
cashless future as quickly as Sweden. This tech-forward country, home to the
music streaming service Spotify and the maker of the Candy Crush mobile games,
has been lured by the innovations that make digital payments easier. It is also
a practical matter, as many of the country’s banks no longer accept or dispense
cash.
Not everyone is cheering. Sweden’s
embrace of electronic payments has alarmed consumer organizations and critics
who warn of a rising threat to privacy and increased vulnerability to
sophisticated Internet crimes. Last year, the number of electronic fraud cases
surged to 140,000, more than double the amount a decade ago, according to
Sweden’s Ministry of Justice.
“It might be trendy,” said Bjorn Eriksson, a
former director of the Swedish police force and former president of Interpol.
“But there are all sorts of risks when a society starts to go cashless.”
Bills and coins now represent just 2
percent of Sweden’s economy, compared with 7.7 percent in the United States and
10 percent in the euro area. This year, only about 20 percent of all consumer
payments in Sweden have been made in cash, compared with an average of 75
percent in the rest of the world, according to Euromonitor International.
Cards are still king in Sweden —
with nearly 2.4 billion credit and debit transactions in 2013, compared with
213 million 15 years earlier. But even plastic is facing competition, as a
rising number of Swedes use apps for everyday commerce.
At more than half of the branches of
the country’s biggest banks, including SEB, Swedbank, Nordea Bank and others,
no cash is kept on hand, nor are cash deposits accepted. They say they are
saving a significant amount on security by removing the incentive for bank
robberies.
Last year, Swedish bank vaults held
around 3.6 billion kronor in notes and coins, down from 8.7 billion in 2010,
according to the Bank for International Settlements. Cash machines, which are
controlled by a Swedish bank consortium, are being dismantled by the hundreds,
especially in rural areas.
Mr. Eriksson, who now heads the
Association of Swedish Private Security Companies, a lobbying group for firms
providing security for cash transfers, accuses banks and credit card companies
of trying to “price cash out of the market” to make way for cards and
electronic payments, which generate fee income.
The government has benefited from
more efficient tax collection, because electronic transactions leave a trail;
in countries like Greece and Italy, where cash is still heavily used, tax
evasion remains a big problem.
Cash is certainly not dead. The
Swedish central bank, the Riksbank, predicts it will decline fast but still be
circulating in 20 years. Recently, the Riksbank issued newly redesigned coins
and notes.
But for an increasing number of
consumers, cash is no longer a habit. At the University of Gothenburg, students
said they almost exclusively used cards and electronic payments. “No one uses
cash,” said Hannah Ek, 23. “I think our generation can live without it.”
The downside, she conceded, was that
it was easy to spend without thinking. “I do spend more,” Ms. Ek said. “But if
I had a 500 krona bill, I’d think twice about spending it all.” (Five hundred
kronor is about $58.)
The shift has rippled through even
the most unlikely corners of the Swedish economy.
Stefan Wikberg, 65, was homeless for
four years after losing his job as an I.T. technician. He has a place to live
now and sells magazines for Situation Stockholm, a charitable organization, and
began using a mobile card reader to take payments, after noticing that almost
no one carried cash.
“Now people can’t get away,” said
Mr. Wikberg, who carries a sign saying he accepts Visa, MasterCard and American
Express. “When they say, ‘I don’t have change,’ I tell them they can pay with
card or even by SMS,” he said, referring to text messages. His sales have grown
by 30 percent since he adopted the card reader two years ago.
At the Filadelfia Stockholm church,
so few of the 1,000 parishioners now carry cash that the church had to adapt,
said Soren Eskilsson, the executive pastor. During a recent Sunday service, the
church’s bank account number was projected onto a large screen. Worshipers
pulled out cellphones and tithed through an app called Swish, a payment system
set up by Sweden’s biggest banks that is fast becoming a rival to cards.
Other congregants lined up at a
special “Kollektomat” card machine, where they could transfer funds to various
church operations. Last year, out of 20 million kronor in tithes collected,
more than 85 percent came in by card or digital payment.
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