Adjö, Krona! Sweden on Its Way to Being the First Cash-Free Economy

Sweden is moving closer to becoming the world’s first cashless economy, with some researchers estimating that every transaction in the country could be digital by 2030, according to a report from Stockholm’s KTH Royal Institute of Technology. Not only are cards, apps and other digital forms of payment increasingly popular in Sweden, cash is simply harder to find. In 2009, there were about 106 billion kronor (about $12.3 billion) in circulation, but now there are less than 80 billion kronor ($9.3 billion) in circulation, according to central bank data cited in the report. The decline is expected to continue.

Apparently, only 40% to 60% of those 80 billion kronor are actually in use, with the rest stowed away in people’s homes or working their way through the underground economy. Several banks in Sweden have gone completely digital and do not accept cash, and consumers who bring cash to banks must explain where it came from, the report says. The elimination of cash is not only a countrywide embrace of technology, it’s also an effort to crack down on organized crime.

A 2014 report from Mastercard on cashless societies estimates that 85% of transactions worldwide are made using cash. In Sweden, it’s quite the opposite. GOOD magazine‘s Mark Hay summarized the digital currency culture in Sweden:

This year, 85 to 90 percent of all transactions in Sweden will likely be electronic, using cards, apps, wire transfers, or some other modern mode of transfer. That number’s even higher — 95 percent — for retail sales. Swedes are so heavily addicted to cards and apps (more so than any other nation) that five of six major banks in the nation have gone cashless; from 2010 to 2012, 500 bank branches moved to all-digital transactions, and removed 900 ATMs from around the nation, making Sweden Europe’s second worst country for cash machine coverage. The last reliable place to get cash in the nation is the supermarket checkout line, where you can get up to 500 kronor ($57) back per transaction when paying with a card. Even Sweden’s church collection plates have gone digital.

That Mastercard report says 59% of transactions in Sweden take place with non-cash methods, which still puts it among the top cashless countries in that report, tied with France, and behind the Netherlands (60%) and Singapore (61%). By contrast, only 45% of transactions in the U.S. are done without cash.

There are plenty of obstacles to achieving a totally cash-free economy, in Sweden and everywhere else, like setting up infrastructure in rural areas and making sure digital payments are reliable. Totally getting rid of cash may not be possible, but with the prevalence of credit cards and the continuing development of new payment methods, we’re definitely getting closer to it.

Adjö, Krona! Sweden on Its Way to Being the First Cash-Free Economy

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