Daily Management Review

Sweden Speeds Towards Cash Free Economy


Sweden Speeds Towards Cash Free Economy
While the Abba Museum of Sweden does not accept bills and coins, it is often common to see homeless street vendors carry mobile credit-card readers in Sweden.
There are very few places in the world that are trending as fast as Sweden towards a cashless future where majority of people prefer to take advantage of the convenience of paying by app and plastic.
Sweden, a tech-forward country has been lured by the innovations that make digital payments easier. As many of the country’s banks no longer accept or dispense cash, it has also become a practical matter.
“We don’t want to be behind the times by taking cash while cash is dying out,” said Bjorn Ulvaeus, a former Abba member who has leveraged the band’s legacy into a sprawling business empire, including the museum.
However there are voices of concerns from among the consumer organizations and critics in the country who warn of a rising threat to privacy and increased vulnerability to sophisticated Internet crimes while talking about Sweden’s embrace of electronic payments.
According to Sweden’s Ministry of Justice, there were more than 140,000 cases of electronic fraud which was more than double the amount a decade ago.

Critics claim that electronic payment could marginalize older adults and refugees in Sweden who use cash. On the other hand the risk of falling prey to debt traps looms large for young people who use apps to pay for everything or take out loans via their mobile phones.
“It might be trendy. But there are all sorts of risks when a society starts to go cashless,” said Bjorn Eriksson, a former director of the Swedish police force and former president of Interpol.
Countries should go cash-free due to reasons related ot personal safety, feels advocates like Mr. Ulvaeus. After his son’s Stockholm apartment was burglarized twice several years ago, Ulvaeus switched to using only card and electronic payment methods.
 “There was such a feeling of insecurity. It made me think: What would happen if this was a cashless society, and the robbers couldn’t sell what they stole?” said Mr. Ulvaeus, who carries no cash at all.
Just 2 percent of Sweden’s economy is comprised of bills and coins which is much lower when compared to 7.7 percent in the United States and 10 percent in the euro area.
According to Euromonitor International, compared with an average of 75 percent in the rest of the world, in 2015, only about 20 percent of all consumer payments in Sweden have been made in cash.
There were more than 2.4 billion credit and debit transactions in 2013 o Sweden compared with 213 million 15 years earlier. As a rising number of Swedes use apps for everyday commerce, even plastic is facing competition.
No cash is kept on hand, nor are cash deposits accepted at more than half of the branches of the country’s biggest banks that include SEB, Swedbank, Nordea Bank and others. The removal of the incentive for bank robberies has resulted in the banks making significant savings on security.
From 8.7 billion in 2010, there were around 3.6 billion kronor in notes and coins in the Swedish bank vaults in 2014, according to the Bank for International Settlements. A Swedish bank consortium is dismantling cash machines by the hundreds especially in rural areas.

For the government electronic cash use s convenient as it can collect more taxes as electronic payments leaves a trail and hence it is not easy to evade taxes. This is the reason that the government has not come down on cashless transactions.