Based on the reports of different researchers, Sweden is on track to becoming the first cashless society in the world. They are crediting this to electronic-only transactions to a new and innovative mobile payment system known as Swish. Swish can facilitate real-time deposits without a minimum spend. According to Niklas Arvidsson of Stockholm’s KTH Royal Institute of Technology, “cash is still an important means of payment in many countries’ markets, but that no longer applies here in Sweden. Our use of cash is small, and it’s decreasing rapidly.” As of 2015 there less than 80 billion Swedish crowns in circulation and of that, only forty to sixty percent was still in regular circulation according to Arvidsson.
Now, a couple of main factors have contributed to Sweden’s sudden shift to electronic-only transactions. It allows businesses to do away with the “minimum spend” rule as it pertains to EFTPOS and credit card transactions. Another factor has been the major uptake of the mobile app Swish and is also the result of a collaboration between several of the major Swedish and Danish banks. As mentioned previously, the app allows for real-time transactions to take place. Users have the ability to transfer money straight from their bank account to anyone else with a bank account regardless of their location. Arvidsson says the Swedes love Swish so much that it has already revolutionized the local banking system to the point where many of the major banks are refusing to accept cash. As of late 2014, four out of every five purchases in the country were being made electronically. Pia Stolt from the Situation Stockholm said, “Swedes are pretty trusting, and we’re used to embracing new technology so, this was the perfect solution. The cashless society campaign we’re seeing in Sweden is definitely a good move as far as we are concerned – it’s unstoppable.”
Another factor that should be considered is the country’s crackdown on money laundering and other organized crime which set many guidelines in place concerning cash use, so most people end up opting for Swish or bank cards. Arvidsson said, “at the offices which do handle banknotes and coins, the customer must explain where the cash comes from, according to the regulations aimed at money laundering and terrorist financing.” Any cash transactions that are seen as “suspicious” by the bank staff are to be reported to the police. The general rule of thumb in Scandinavia is that if you have to pay with cash, then something is wrong.
Even though they are moving towards a cashless society, recent surveys show that two-thirds of Swedes still believe that carrying cash is a human right, whether or not they decide to actually do it.