Sweden waves goodbye to cash, embarks on the cashless society quest

In Sweden, there is less than SEK 80 billion in circulation (about EUR 8 billion) a sharp decline from 2010, when the total was 106 billion, according to a recent study from KTH-Royal Institute of Technology. “Our use of cash is small, and its decreasing rapidly,” says Niclas Arvidsson, researcher and author of the study. “Cash is still an important means of payment in many countries markets, but that no longer applies here in Sweden.”

“In the retail industry (in Sweden), about 80% of all transaction are made by cards, and 20% in cash, and this number is increasing”, says Bengt Nilervall, Head of Payment Systems, Swedish Trade Federation. “We have a big trust in the government, the system, the banks, and the authorities.”

For most private consumers, being able to pay with a card or via the very popular mobile payment app Swish, is convenient, secure, and free. Cards are used for purchases both small and large, and there are many instances where only digital payments are accepted.

Of course not everyone has a smartphone or debit card, and there are groups in society that may not be as receptive to the idea of a cashless society, for example the elderly or rural population. There are also those who disagree with the loss of privacy and freedom in a system where all monetary transactions can be tracked.

On the retailer side, it seems most welcome the security and convenience of cash free sales. For small businesses and street vendors, the Swedish iZettle mobile payment solution for cards, or mobile app Swish, allow for easy payments. As with traditional credit card transactions however, the new digital solutions are also starting to charge fees for businesses, frustrating some vendors who must cover such costs, even for small purchases.