Bills and coins now represent just 2 percent of Sweden’s economy, compared with 7.7 percent in the United States and 10 percent in the euro area. This year, only about 20 percent of all consumer payments in Sweden have been made in cash, compared with an average of 75 percent 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 the country’s biggest banks, including SEB, Swedbank, Nordea Bank and others, 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.
Here is the full NYT story by Liz Alderman.
2 words: narrow banking.
?
If a Grecian-type event should occur bank deposits will be easily confiscated by the government but that could never happen in super-civilized Sweden. The important thing is that banks, and ultimately all businesses, will no longer be forced to pay for security to protect cash. Government will also be able to monitor the economy more effectively as well. No more “gray market” cash payments for haircuts or drain cleaning. No more tax collection problems. This will be mandatory in the US soon, along with a tax on all financial transactions. Whenever someone purchases a box of .357 cartridges a bell will ring at the ATF. Neighborhood poker parties will pay off in pizzas. Ticket scalping will become extinct.
At the same time, bitter clingers will return to barter. A successful fisherman will be able to trade some herring for moonshine. Eventually another form of money will come into use. Even the Swedes can’t fight human nature.
I suppose you don’t own a business that accepts cash. Cash it’s a temptation for robbers, external or your employees.
Temptation. Remove temptation and everything will be much better.
Temptation is the reason women in Saudi Arabia dress in the abaya and niqab. Men aren’t tempted to run off with the wife or daughter of another.
I admit, very poor choice of words. Scratch temptation and put risk.
What could go wrong?
First, they came for the gold. Then, they came for the paper money. […]
Does Sweden have deposit insurance? If so, is the reserve fund solvent?
It seems every other year someone uses my credit card number and the credit card company loses on the dishonest transactions. I do lose when I use cash.
It’s not about efficiency or security, it’s about control. Think “capital” controls.
I think I’ll keep the cash in the mattress, the gold and silver coins, the tools, the survival rats, the cases of booze, the cans of .223 cal., . . .
It’s definitely true, I haven’t used cash for a transaction in (quite literally) months. I think the last time was this summer, because I was going to a flea-market kind of a thing, so I went to an ATM machine. Literally every other place you go to buy stuff accepts cards, and it’s so much faster and easier.
I’m actually kinda bummed about it, because new designs for the currency was just released, and I haven’t seen any of the new bills yet.
“it’s so much faster and easier.”
Yeah, that’s what life’s all about, fast and easy.
Fast…it actually takes less time to pay for something with cash than it does with a credit card.
Easier…the payer has to reach into it’s pocket or handbag for either cash or a credit card. Never have to show ID with cash. Should get a discount with cash on any purchase that can be made with a credit card. Demand it.
Figure out how many petty transactions that you could make in a lifetime and then multiply them by the mythical time saved. Put that time in your time piggy-bank and then use it for a vacation in Mogadishu, Somalia for how long?
Ever heard of contactless payments? Show an ID? You mean the payment system does not use a PIN for validation? Also, add time spent on ATM to your time budget.
I’ve been able to do a card transaction faster in Sweden since the early 2000’s than the cashier have been able to figure out what denomination change to give on most cash purchases.
It’s amazing how smug one can be about a place one so obviously knows nothing about. No one shows ID in Sweden for paying by card. (Unless you have a foreign card with a magnetic stripe.)
Thanks for playing though.
Those few seconds that you “save” on your lutefisk purchase can then be devoted to listening to Little Dragon while you drive through the snow in your Volvo wagon.
It beats the pants off making passive-agressive potshots in the comments.
If that was passive aggressive I apologize, English isn’t my first language; I was going for actively aggressive.
Nope, you’re fine, Kit. I was responding to chuck.
The same in the US. I haven’t used cash for a long time. I have to remember to get some once in a while “just in case.”
I suspect US will have more cash use because many Americans do not have a bank account. Also, maybe more drug dealing and underground economy.
By the way, if you ever notice the long lines for money orders, this is because many landlords no longer accept checks. Banks often don’t allow some people to open checking accounts, and the $14/month charge now that the CFPB has made fees illegal is quite expensive, too. These would drive more cash transactions among the poor.
The same applies in Denmark. Even buying used stuff is mostly cashless these days.
In the future only lawyers will be able to commit theft.
Panhandlers must be hurt by a non-cash economy.
Strippers too.
–and as everyone knows, a Coronal Mass Ejection could NEVER strike or severely impact Scandinavia, never ever, certainly not one that would render all e-commerce and e-banking there impossible, no, it could never happen, not even on a sunny day.
Somewhat interestingly, it means Swedish consumer spending is all* routed through VISA and Mastercard.
Yeah, a nice little cut off every purchase.
How much are they spending on digital security to offset other security risks?
In the era of the ever expanding spy state, and the apparent willingness of both corporations and consumers to just roll over in the face of “security” demands for data/information … in the event that America turns cashless, how long until NSA would deem it to be its business to have full access to all data on all transactions everywhere?
Consumers and citizens will need to be very vigilant in protecting against potential (ergo likely) excesses of the spy state as we move towards an increasingly cashless society.
Personally, I don’t think it’s worth it. It might save some small amount in terms of the cost of cash, but most plastic modes of payment take a decent cut too – meanwhile, the potential downsides of a cashless society, if one is willing to entertain some reasonable paranoia, could be quite enormous.
I think a cashless society is a greater threat to freedom than terrorism. As usual, the markets will decide.
The issues of NSA spying, general central government information hoarding, state control of the monetary system aren’t necessarily a danger in themselves, The danger is that no state apparatus lasts forever. In the course of time they are taken over either by groups within the state (Nazis in Germany, for example) or by forces from the outside (Americans in Hawaii, Japanese in China). These usurpers then have an established framework from which to implement their own ideologies, usually at a disadvantage to the general population. Prediction of when such a transition might occur is impossible so it’s best never to allow anyone to have that kind of centralized power.
What if the lower usage of bills and coins is just because cheques disappeared long ago? If you receive a payment in a cheque you need to cash it or deposit it before using the money. If you receive an electronic transfer you can make use of the money without stopping by the ATM.
I’m a fan of moving to a consumption tax, so this is a positive move. Well, to be honest, I am not a fan of any tax regime but it is the best house in a bad neighborhood.
It isn’t sufficient, since high levels of taxation will prompt the formation of an ad-hoc currency or a barter system, but it is a start.