STOCKHOLM — When Victor goes out to lunch with friends in Stockholm, he no longer needs to worry about carrying enough cash. “If someone else pays the bill, I pay him back with the Swish app on my phone.”
Same kind of calculation goes for Victor, a 23-year-old wine salesman. “I use my card for everything, regardless of the amount. This is my sixth year without any cash in my pocket,” he says.
In Sweden, the rate of cash payments in stores fell from 40% in 2010 to a stunning 15% in 2016. In terms of total value of purchases, the percentage has tumbled to 1.4%. According to a study by the country's central bank, two-thirds of Swedes now feel they could live without cash. “It’s a unique development internationally,” according to the bank.
Here in the Swedish capital, a city of some one million inhabitants, it is mpossible to pay for public transportation with cash, and forget about checks, an ancient relic abandoned 20 years ago. In church, rather than passing a basket around, congregants donate money using Swish or iZettle, a mini-card reader that connects to a mobile phone. These payment systems have also been adopted in markets, by middle-school students selling raffle tickets and even by homeless people panhandling on the streets.
In 1661, Sweden became the first European country to print banknotes.
Many businesses in Stockholm simple no longer accept cash. One of the first to take this step, legal in Sweden, was ABBA singer Björn Ulvaeus, after his son had been repeatedly robbed. Since 2013, the ABBA museum in Stockholm has been completely “cashless.”
David Zetterström, the owner of a bakery chain with 16 shops in the city, took the same step a year ago. “The main reason was the safety of our employees,” he explained at his shop in the trendy Södermalm district. “When they would close up for the night, they’d have to count the money, pack it, move it, and that’s dangerous. Older people or tourists are often surprised, but 99% of our clients understand the reason for this change. Plus, they all have credit cards.”
The trend marks a historical full-circle for Sweden, which in 1661 became the first European country to print banknotes. For Niklas Arvidsson, a professor at the Royal Institute of Technology in Stockholm, this change can be explained through the Swedish penchant for new technology. The country, which is the birthplace of the first cell phone (Ericsson), the music-sharing site Spotify and the game “Candy Crush,” has naturally moved more easily to cashless payment methods. Another important factor is confidence: “The Swedish don’t have to see or touch their money to know it’s safe. They’re confident in the banks and the government,” he said.
This is a sentiment shared at Get Swish, one of the most impressive Swedish success stories. Last August, 25 million payments were made via Swish, for a total of 1.5 billion euros (about $1.7 billion). During peak usage, at lunchtime or on payday, the frequency of payments goes up to 30 per second. “All you need is a smartphone — download the Swish app, connect your mobile number to your account, and you can send money to any of the six million users,” explained Edvin Nygaard, a developer at Swish. “No more need for cash to pay your babysitter or pay back a friend. You take out your phone and transfer the money immediately.”
Last year, there were only two bank robberies, compared to 110 in 2008.
Today, Swedish banks are the first to praise this method. In the Kungsträdgården branch of SEB, clients are received in small cozy boxes, the bank tellers swirl around with their laptops in hand and a DJ grooves in front of his turntables, ensuring a good ambiance. The bank no longer looks anything like a bank — and indeed, you cannot deposit or withdraw money there.
“It’s like this at most of our branches now,” says Leif Trogen, of the Swedish Bankers’ Association, with satisfaction. “All transactions can be carried out online, for a long while now, and we no longer need to move tons of bills across all of Sweden. Last year, there were only two bank robberies, compared to 110 in 2008. It's good for security and good for the environment.” And excellent for the banks, who control the main network of ATMs and hold shares in Swish.
A fish market in Sweden. Here, locals may soon pay for their seafood without cash. [News Oresund/Flickr]
Yet this ideal world leaves some stuck on the outside: the many refugees, for instance, who do not have bank accounts; people living in rural or remote areas, where there is little Internet access; or people with handicaps and senior citizens. In a nearby bank branch in Karlaplan, some half a dozen elderly customers, some holding walkers, wait in front of one of the few tellers where cash is still available. “I want to send money to my daughter, but I don’t have a computer,” explains Birgitt, 79. “So I have to come here.”
Bo Johansson, who heads an association for the retired in the county of Stockholm, deplores the situation. “People who haven’t mastered the Internet or who don’t have credit cards have to travel far with their money just to find a bank. They can’t buy public transportation tickets, they can’t pay in certain shops. You even need a card just to go to the toilet at the train station!” The situation is all the more absurd, he says, because just this year Sweden replaced its old bills with new ones bearing Swedish cultural icons, such as Greta Garbo or the director Ingmar Bergman.
Björn Eriksson, who heads Cash Uprising, a group fighting for the continued use of cash, says one million people, or 10% of the Swedish population, will be forced off the digital highway “because they’re not profitable.”
“If I open my wallet,” he said, “you’ll see a lot of cards. I use them, but I want to have the option of using cash, too.” As a former chief of police, he also quickly dismisses the banks’ arguments about security. “Robberies have gone down, it’s true, but now thieves attack small stores that are open overnight. Less cash is circulating, that's true, but that just increases the risk of loss of privacy, and people know this. Even those who use a card to shop admit that they use cash when they buy alcohol in government stores, because you never know.”
The entire transaction should be digital.
Objections are not reserved for the nostalgics. A report published by the central bank in September warned that “in the eventuality of a systemic shock, an alternative form of payment, such as cash, might not be as easily available as it is today.” In other words, in case of a Russian cyber-attack, or a giant IT breach, Sweden could rapidly descend into chaos.
Per Bolund, the minister for financial markets, tries to reassure: “If you want to use cash, you should be able to. The government funds ‘service points’ in certain stores, places where you can withdraw and deposit money. Cash is always useful, even if it plays a smaller role in our economy.”
Will Sweden continue on this path? If you walk around the premises of Epicenter, a start-up colony in the center of Stockholm where some 2,000 people work to shape our future lifestyles, between two yoga classes and a cup of protein coffee, the answer is a resounding yes.
Timo Keihag, a former Ericsson employee, moved here to develop Rezeet, an app that sends your receipts directly to your phone. “When we buy something with our phone or watch, we don’t want to then stuff our pockets with receipts. The entire transaction should be digital,” he said.
While he waits for his product to be launched, he recently implanted a small chip, the size of a grain of rice, in his right hand, which already allows him to take the train and the metro, open doors and pay for drinks in the Epicenter cafeteria, he says.
“The Swedish government said that cash could disappear completely by 2030,” he adds. “But I’m sure it'll happen much sooner.”