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Sweden proposes ‘no cash’ future…

3/20/2012

Sweden was the first European country to introduce bank notes in 1661. 

Now it’s come farther than most on the path toward getting rid of them.

In most Swedish cities, public buses don’t accept cash; tickets are prepaid or purchased with a cell phone text message.  A small but growing number of businesses only take cards, and some bank offices have stopped handling cash altogether.

Banknotes and coins represent only 3 percent of Sweden’s economy, compared to an average of 9 percent in the Eurozone and 7 percent in the U.S., according to the Bank for International Settlements.

In some towns, it is not possible to use cash at the bank anymore.  This is a problem for the elderly that don’t have credit cards or are unfamiliar with using them to withdraw funds.

The Swedish Banker’s Association says the shrinkage of the cash economy is already making an impact in crime statistics.  The number of bank robberies in Sweden plunged from 110 in 2008 to just 16 in 2011.

Also with the increase in electronic transactions and the inevitable digital trail, Sweden has less of a problem with graft than in countries with a stronger cash culture, such as Italy or Greece.

However, the flip side is the increase in cybercrimes.  According to the Swedish National Council for Crime Prevention the number of computerized fraud cases, including skimming, surged to nearly 20,000 in 2011 from 3,304 in 2000. 

It’s no surprise that Sweden and other Nordic countries are at the forefront of this development, given their emphasis on technology and innovation.  But, even with advanced technology and innovation there is always resistance to change.

Most experts don’t expect physical money to disappear anytime soon, but that its proportion of the economy will continue to decline as such payment options become available.