Why Sweden is becoming an economy without cash

Sweden is the most cashless society on the planet, with only 1% of the value of any payments to be made using coins or tickets in the last year. So, how the Nordic nation get so far ahead of the rest of us?

Warm cinnamon buns are stacked next to mounds of freshly-baked sourdough bread to a neighborhood coffee shop in Kungsholmen, west of the city centre of Stockholm.

Among the other Scandinavian key minimalist white tiles and exposed-filament light bulbs – is another increasingly common place in the Swedish capital: “We don’t accept cash”.

“We wanted to reduce the risk of theft and it is faster with customers when paying by card,” explains Victoria Nilsson, who runs the bakery of the chain of 16 stores across the city.

“It is mainly positive reactions. We love to use our cards here in Stockholm.”

Across the country, silver is now used in less than 20% of retail transactions in half five years ago, according to the Bank of sweden, the Sweden, the central bank.

The coins and bank notes have been banned in the bus for several years after unions raised concerns on the safety of drivers.

Even the tourist attractions have started to play on the outlet of plastic, only the payments, including the Stockholm Pops Home from the Hotel and The Museum Abba.

The iconic band’s Bjorn Ulvaeus is, in fact, one of the most ardent defenders of Sweden, of the cash free of trend, after that his son has lost cash in an apartment burglary.

Small retailers are jumping on the bandwagon, too, making the use of products of technology such as iZettle, the Swedish start-up behind the Europe’s first mobile credit card reader.

These mobile technologies have enabled traders, and even the homeless people the promotion of charity magazines – to take card payments easily.

“I took my children to the funfair and there was a guy selling balloons and he had a card machine with him,” remarks Senobar Johnsen, one of the Swedish customers back to the bakery.

Currently living in Portsmouth, in the south of England, she is visiting Sweden for the first time in a year and said that it is “visible” that people are paying more with cards.

“This is not like the UK where there is often a minimum of expense when you go to a kiosk or you’re in the middle of nowhere. I think it’s great”.

Swish, a smartphone payment system, is another popular Swedish innovation used by more than half of the country of 10 million inhabitants.

Supported by the big banks, it allows customers to send money securely to someone else with the application, simply by using their mobile number.

A staple at flea markets and in the school holidays, it is also a popular way to transfer money instantly between friends: the Swedes can no longer get away with delaying their share of a restaurant bill using the excuse that they are short of cash.

“In general, consumers are very interested in new technologies, so we are pretty early to adopt [them],” says Niklas Arvidsson, a professor at Stockholm’s Royal Institute of Technology.

This is, in part, to the infrastructure (Sweden is among the best-connected counties in the EU); a relatively small population, which is an ideal test-bed for innovation; and the country’s historically low levels of corruption, he argues.

“The swedes tend to trust banks, the trust we have in institutions… the people are not afraid of the sort of “Big Brother” issues or fraud related to electronic payment.”

Paradoxically enough, the Sweden, the decision of updating its coins and bank notes, a move announced by the Bank of sweden in 2010 and fully implemented this year, in fact amplified, transactions without cash, ” says Prof Arvidsson.More Technology of Business

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“You would have thought that a new kind of cash would have created an interest, but the reaction seems to have been the opposite,” he says.

“Some of the retailers of thought, it is easier not to accept these new forms of cash, because there is learning to do, may be the investment of cash registration machines and so on.”

There has also been a “training effect”, he said, with more stores of the signature of the scriptural idea, as it becomes increasingly socially acceptable.

The Swedish central bank figures reveal that the average value of the Swedish krona in circulation rose from $ 106 billion (£10) in 2009 to $ 65 billion (£6 billion) in 2016.

Barely 1% of the value of all the payments have been made using coins or notes of the last year, compared to approximately 7% in the EU and the united states.

Prof Arvidsson predicted that the use of the cash will probably be reduced to “a very marginal form of payment by 2020.

Retailers seem to be okay. A survey has not yet published, with nearly 800 small retailers conducted by his research team has found that two-thirds of respondents said they expected the phasing out of cash payments completely by 2030.

But the trend is not to the taste of everyone, as Bjorn Eriksson, former national police commissioner and president of Interpol, explains from the suburb of Alvik.

Here, his local coffee shop still accepts the old money, but many of those banks no longer offer cash deposits or over-the-counter withdrawals.

“I love the cards. I’m just angry because about one million people can not face cards: the elderly, ex-prisoners, tourists, immigrants. The banks do not care because [these groups] are not profitable,” he maintains.

The 71-year-old, is the face of a national movement called Kontantupproret Cash (Rebellion), which is also concerned about identity theft, the rise of consumer debt and the cyber-attacks.

“This system can easily be disrupted or manipulated. Why invade us when it is so easy? Just cut the payment system and we are completely helpless,” says Mr. Eriksson.

His arguments have not escaped the attention of politicians in Sweden, where security debates are increasingly on the agenda in the wake of a government agency data breach that almost brought the coalition to power in July.

During this time, the backdrop of an increasingly divided electorate suggests that rural and elderly voters could prove crucial in the Nordic countries the next general election, scheduled for September 2018.

Back in Stockholm, Royal Institute of Technology, Professor Arvidsson points out that, although most Swedes have adopted the nation’s cash-free innovation, two-thirds do not want to get rid of notes and coins completely.

“He has a very strong emotional connection to cash among the Swedes, even if they do not use it,” he said.

Sweden, the leader of the global trend towards a cashless future, but it is high-tech of the population also seems to be guided by another, more traditional Swedish trait: caution.Follow the Company’s Technology editor Matthew Wall on Twitter and Facebook
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