Sweden: running from the cash machine

In a world where cash may become superfluous, Sweden is closest to a cashless future

For a minimalist society like Sweden, cash has long been an unwanted appendage.

“We haven’t accepted cash for maybe a year and a half,” says Märta Skilimark, manager at Swedish coffee and tea store Johan & Nyström. “Our Swedish customers are very used to it. It’s basically tourists who are surprised we don’t take cash.”

According to the Riksbank, Sweden’s central bank, more than 80 per cent of store transactions are cashless. Similarly, from 2013 to 2014, Sweden’s cash-to-GDP ratio shrank 5.8 per cent as increasing quantities of physical money fell out of circulation. With digital payment systems such as Swish and iZettle having taken the country by storm, cash is falling by the wayside.

Cashless society

For Henrik Crone, a Swede and head of fintech in Europe for global information technology services company Virtusa, a cashless Sweden cannot come soon enough. In fact, it might as well be here already.

“If I’m in Sweden, I don’t pay in cash,” Mr Crone says. “I don’t have wallet space for coins at all, I don’t carry them. I have my cell phone and I have my credit card, that’s all I need.”

For Mr Crone, Sweden being the standard bearer for a cashless world comes down to the history of its existence. The combination of a small population and a vast country has rendered excellent communication a basic necessity and, with Sweden’s quick embrace of broadband technology, sending money by digital means was just the next logical step. What’s more, government encouragement is absolutely key.

“If you’re going to have a cashless society, it has to come from the government down to the customer; it will have to have the legal framework in place,” he says.

Sweden’s Riksbank is examining whether or not it would be possible to introduce e-krona as a digital currency. Like bitcoin, it would be a wholly digital currency. Unlike bitcoin, it would have the weight and security of a central bank behind it. But Sweden isn’t alone in this endeavour. Denmark, among other countries, is also looking into an electronic currency.

Mr Crone, a huge fan of mobile fintech and paying apps, adds that ever-improving technology will eventually render cash obsolete in Sweden and beyond, even without digital currencies.

“Slowly everything will be handled through your phone, then your gadgets, even your fridge, and anybody will be able to reach your account in a controlled manner,” he says. “There will be no point to bills or cash – you won’t need it.”

While Mr Crone is convinced that a cashless Sweden, perhaps a cashless world, will be established in our lifetime, living without cash is already a reality for Ms Skilimark.

“I barely use cash these days,” she says. “Basically every store in Sweden takes cards. Maybe there aren’t many places that only take cards, but you can always pay with card.”

And does Ms Skilimark think that life without cash makes for an easier existence? “Yeah, I do,” she says.