In Sweden, cash is not king - it's almost extinct

Tech-forward country hooked on convenience of paying by app and plastic, but move alarms consumer groups

STOCKHOLM • Parishioners text tithes to their churches. Homeless street vendors carry mobile credit- card readers. Even the Abba Museum, despite being a shrine to the 1970s pop group that wrote "Money, Money, Money", considers cash so last-century that it does not accept bills and coins.

Few places are tilting towards a cashless future as quickly as Sweden, which has become hooked on the convenience of paying by app and plastic.

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.

At the Abba Museum, "we don't want to be behind the times by taking cash while cash is dying out", said Mr Bjorn Ulvaeus, a member of the disbanded group who has leveraged the band's legacy into a sprawling business empire, including the museum.

Not everyone is cheering. Sweden's embrace of electronic payments has alarmed consumer organisations 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 figure a decade ago, according to Sweden's Ministry of Justice.

Older adults and refugees in Sweden who use cash may be marginalised, critics say. And young people who use apps to pay for everything or take out loans via their mobile phones risk falling into debt.

"It might be trendy," said Mr 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."

But advocates like Mr Ulvaeus cite personal safety as a reason countries should go cash-free. He switched to using only card and electronic payments after his son's Stockholm apartment was burgled twice several years ago.

"There was such a feeling of insecurity," said Mr Ulvaeus, who carries no cash at all. "It made me think: What would happen if this was a cashless society, and the robbers couldn't sell what they stole?"

Bills and coins now represent just 2 per cent of Sweden's economy, compared with 7.7 per cent in the United States and 10 per cent in the euro zone. This year, only a fifth of all consumer payments in Sweden have been made in cash, compared with an average of 75 per cent 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 Sweden's biggest banks, including SEB, Swedbank and Nordea Bank, 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.

The government has not sought to stem the cashless tide. If anything, it 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.

At the Filadelfia Stockholm church, so few of the 1,000 parishioners now carry cash that the church had to adapt, said executive pastor Soren Eskilsson. During a recent Sunday service, the church's bank account number was projected onto a big screen. Worshippers pulled out cellphones and tithed through an app called Swish.

"Everything speaks in favour of a cashless society," said Mr Ulvaeus as he strolled past the Abba Museum to retrieve his car. "It's a utopian thought, but we're very close to it." He paused at a hot-dog stand for a snack. But when he was ready to pay, the card reader was broken.

"Sorry," the vendor said. "You'll have to use cash."


A version of this article appeared in the print edition of The Straits Times on December 28, 2015, with the headline 'In Sweden, cash is not king - it's almost extinct'. Print Edition | Subscribe