Sweden Puts The Kibosh On Cash

In Sweden, the movement to a cashless society is gathering speed.

The New York Times reported that the nation has become “hooked on the convenience of paying by app and plastic.” The key impetus lies in the fact that a large number of the nation’s banks do not traffic in cash, either taking it in or doling it out. To get a sense of just how prevalent the non-cash movement is, consider the fact that more than half of the nation’s biggest banks — ranging from Nordea to SEB — have mandated that no cash be kept on hand, with an eye on preventing bank robberies.

Indeed, the cash supply is dwindling, as the physical holdings of cash at Swedish banks last year, as cited by NYT, stood at 3.6 billion kronor, which is a far cry from the 8.7 billion seen five years ago, as estimated by the Bank for International Settlements. Cash machines are being dismantled and discontinued.

And yet the movement to electronic payments, wallets and the like is not without its critics, among them consumer organizations and other parties concerned about the looming threat of cyber-based malfeasance. As electronic payments have surged, so too has fraud, as the number of fraud cases in the nation recently topped 140,000, which is more than double the amount seen just a decade ago. A key concern: Younger payers can fall deeply into debt. In addition, older citizens may be at risk of being frozen out of society as they continue to be stuck in the old ways of using cash.

For the moment, the use of cards still holds sway, with bills and hard currency, such as coins, making up 2 percent of the economy in Sweden, with as much as 7 percent in other nations such as the United States and a whopping 10 percent elsewhere in the Europe.