Someday in the future, cash will become as outdated as beepers and square-toed shoes. The notion of slapping some green or loose coinage into palms will seem as quaint as people handwriting long-form letters. In Sweden, however, that “someday” seems to be coming sooner rather than later.
The signs of the coming cash-pocalypse are rampant there. In most Swedish cities, you can’t even pay for a bus ride without plastic. Tickets are also paid in advance with credit or bought via mobile phones, and more businesses are taking on the anti-cash stance, with plastic being the preferred (and frequently only) form of payment accepted. There are even some banks, which indeed specialize in money, that refuse to deal with the foldable kind. What’s next? Homeless people asking for handouts via credit card charge? Not quite, but the places they seek solace in are starting to hop on the bandwagon. At Karlshamn’s Carl Gustaf Church in southern Sweden, Vicar Johan Tyrberg put in a credit card reader to handle the flock’s donations.
It’s interesting that, back in 1661, Sweden was the first country in Europe to adopt bank notes. And now once again, it’s at the forefront of the western world’s currency trends. According to the Bank for International Settlements, cash only accounts for three percent of its economy. Compared to the rest of Europe and the U.S., which average nine and seven percent respectively, that’s quite a headstart.
Different countries have different motivations for going cashless. At the end of last year, Italian Prime Minister Mario Monti beefed up restrictions for cash payments, primarily to combat the growing problem with tax evasion. People dodging VAT or income taxes tend to “hide” funds by keeping them in bills and coins. Problem is, it’s hard to conduct larger transactions this way. Knowing this, Monti has instituted policies that limit cash payments, which were previously restricted to €2,500, down to less than €1,000 ($1,300).
Crime is also among the reasons for the growing anti-cash sentiment in Sweden. As the country moved away from cold hard currency, robbery statistics also went down. And not just personal theft. Security vehicles experienced fewer attacks, and bank hold-ups decreased quite a bit, from 110 in 2008 to 16 in 2011. So on the surface, it seems like a cashless society could lead to a safer one. But let’s think about that for a second: If material currency goes away, then we’re clearly talking about a digital economy. Sure, there’s no physical money to steal then, but it’s a trade off, as crime in another sector is highly likely to explode. You know what I’m talking about here, don’t you? It’s that little thing that’s been grabbing big headlines over the last few years — hacking.
Cyber crime is already rampant as it is, and with this trend, it’s destined to balloon in the future. Things will get even trickier (and riskier) still, as credit cards give way to smartphones. That’s why developers are hard at work in Sweden and other places, trying to lock down devices, applications and backend systems. And hacking isn’t the only challenge. Even if everything was sealed up tight, there’d still be reticent people — folks like the elderly, those who live in remote areas, technophobes and others — who may have a hard time adjusting to a cashless society.
Still, this is where things are going. Cash is clearly dying off, and not just in Sweden. And while it may seem like a slow death, it seems the pace is starting to quicken. It won’t be long before the thought of paying for goods with papers will seem as antiquated as peasants trading pigs for a woman’s hand in marriage.
How do you feel about the impending death of cash? Are you a proponent of the digital economy, or does the thought make you nervous? Weigh in.