Sweden on course to be first cashless country
21 October 2015 | 19995 views | 15
Sweden is on track to becoming the world's first cashless society, thanks to the country's embrace of IT, as well as a crackdown on organised crime and terror, according to a study from Stockholm's KTH Royal Institute of Technology.
Niklas Arvidsson, a researcher in industrial economics and management at KTH, says that the widespread and growing embrace of the mobile P2P payment system, Swish, is helping hasten the day when Sweden replaces cash altogether.
"Cash is still an important means of payment in many countries' markets, but that no longer applies here in Sweden," Arvidsson says. "Our use of cash is small, and it's decreasing rapidly."
In a country where bank cards are routinely used for even the smallest purchases, there are less than 80 billion Swedish crowns in circulation (about EUR8 billion), a sharp decline from just six years ago, when the total in circulation was SEK106 billion.
"And out of that amount, only somewhere between 40 and 60 percent is actually in regular circulation," he says. The rest is socked away in people's homes and bank deposit boxes, or can be found circulating in the underground economy.
The result of collaboration between major Swedish and Danish banks, Swish is a direct payment app that is used for transactions between individuals, in real time.
But if Swish starts to be used on a larger scale and grows to include retail transactions and e-commerce, Arvidsson says the prospect of a cashless future will come ever closer to reality.
Sweden will still have to ensure that all people are able to participate in a cashless payment system, Arvidsson acknowledges. The transformation would present serious challenges for those who are unfamiliar with computers and mobile phones — mainly older people living in rural areas.
Other segments of the population likely to feel the impact are the homeless and undocumented immigrants.