Sweden's Cashless Experiment: Is It Too Much Too Fast?

Enlarge this image toggle caption Maddy Savage for NPR Maddy Savage for NPR

Cash is still king around the world, but there are pockets of places, especially in Europe, moving away from cash. And no one is dropping cash as fast as Sweden.

In 2018, only 13 percent of Swedes reported using cash for a recent purchase, according to a nationwide survey, down from around 40 percent in 2010. In the capital, Stockholm, most people can't even remember the last time they had coins jingling in their pockets.

By contrast, around 70 percent of Americans still use cash on a weekly basis, according to a recent study by the Pew Research Center.

In Sweden, however, especially in bigger cities, going cashless is becoming the norm. Purchases usually happen as digital transactions — by card, online or with Sweden's most popular mobile payment app, Swish.

"It's good for both the guests and for us," says Christopher Loob, general manager of Urban Deli, a restaurant and ecological food company in Stockholm that stopped accepting cash a year ago. "It's saved us a lot of time in that we don't have to count cash anymore. There's hardly been any reaction. Almost everybody has the alternative payment method — a credit card."

The trend has spurred Ikea to test making its store in Gavle (about 100 miles north of Stockholm) completely cash free. And Ahlens, the country's largest department store chain, is also experimenting with the concept in some locations. Buses and trains no longer take bills or change. Nationwide rail company SJ has even started allowing customers to store digital tickets on microchips in their hands.

But all this change has also spurred a debate in the Nordic nation over the consequences of how quickly Sweden is going cashless, especially for the most vulnerable groups in society. Many retirees, people with disabilities and newly arrived refugees struggle with digital transactions.

"If you go to a bar or if you go to some shops, they say to you that the only way to pay is to pay with cards or this Swish system," explains 75-year-old Christina Tallberg, who is president of the Swedish National Pensioners' Organisation.

She says that even going to public toilets can pose a problem. These often cost 10 kronor (around a dollar) in Sweden, but the toilets rarely accept cash these days.

"This is both a personal problem, but it's also a problem for the civic society," Tallberg says. "As long as it's legal to pay with notes and coins, it must be up to the individual to choose how you will do your payments."

Another concern is that the majority of local bank branches have stopped letting people take out cash or even bring cash into the bank. Even Sweden's central bank — the Riksbank — which largely supports the transformation of the country's payment system, has also argued that going completely cashless can be risky.

"We would like to see the banks continuing supplying their customers with cash services," says Bjorn Segendorf, an adviser in the Riksbank's payments department. "It gives the freedom of choice for consumers. It's also [because] still there are people who are dependent on cash."

He says that many of those working in the financial sector have been "taken by surprise" by the speed at which Sweden seems to be phasing out cash.

"Most countries are pushing digital technology, and if you are successful, this will have consequences for cash," Segendorf says. "You have to realize this early, and I think we were too late with that."

A digital frontier

A big reason that Sweden has moved more quickly than other places toward becoming a cashless society is that the country is also considered a pioneer in digital technologies.

Strong broadband coverage, even in remote areas, and a small, tech-savvy population of just 10 million have contributed to the cashless trend picking up more quickly in Sweden than elsewhere. Meanwhile, businesses have been keen to get rid of coins and notes since a string of high-profile robberies in the early 2000s that got unions campaigning for cash-free workplaces.

Also, a lot of Swedes just have a deeper trust in both institutions and new technologies. That has delayed public debates about digital security, compared with other nations, where populations are warier of state or company surveillance, according to Claire Ingram Bogusz, a researcher at the Stockholm School of Economics, who studies digital payment systems.

"Ordinary Swedes are not concerned at all. The convenience of having your bank account, your money at your fingertips and increasingly on your smart watch vastly outweighs any concerns that they have about security or about being tracked," she says.

However, Ingram Bogusz points out that the recent Cambridge Analytica scandal, in which a personality profile test scooped up Facebook users' data for political research, has made more people aware of how their data could be used. Also, advocacy groups are becoming increasingly vocal about the potential downsides of a cashless society.

"There is a very, very large number of people who ... don't think that the state should be trusted as blindly as many do," Ingram Bogusz says.

A parliamentary committee is studying the impact of Sweden's falling cash use. And lawmakers are exploring how well the country could handle digital payments in the event of a hacking or power failure. Last year, the government issued a leaflet to all Swedish households advising them to put some cash aside in case of a national crisis or even war.

Meanwhile, Sweden's central bank is testing out a new state-issued digital currency, the e-krona, which it hopes could be less vulnerable to attacks — by being independent from global payment systems like Visa and Mastercard.

Despite the popularity of digital payment systems, studies suggest that the majority of Swedes believe that bills and coins should continue to exist, even if they rarely use them.

One survey by the Swedish polling firm Sifo last year suggested that seven out of 10 Swedes still want the option to be able to use cash as well as cards and apps.

"I like the idea of having cash myself but also having money in a bank ... and using both ways of payment," remarks Annabelle Nowak Braberg, 19, who was studying with friends back at Urban Deli.

"Last week, I had lost my card and I had to order a new one, so I had to take out some cash," Nowak Braberg says.

Sweden may be at the forefront of the cashless trend, but it seems the country is still not quite ready for a completely cashless future.