Nordic countries are leading a shift by rich nations towards cashless societies, providing a test case for whether the lower cost and convenience of using cards and smartphones for payments outweigh the risks of fraud and some people being left behind.
Helped by wide use of computers even among the elderly, broad trust in the state and big business and only small black economies, people in Sweden and neighbouring countries are fast embracing cards, the Internet and apps for financial transactions, and forsaking notes and coins.
“We are headed more and more for a cashless society,” said Jan Digranes, a director at Finance Norway, which represents banks and other financial institutions.
Sweden ranks top in the European Union for card payments, with 230 transactions per inhabitant in 2012, just above Denmark and Finland and well ahead of Britain on 167, Germany 39 and Italy 28, according to the European Central Bank.
Non-EU members Norway and Iceland are also among top users of cards worldwide, their central banks say.
For banks and businesses, the big benefit is lower costs.
A report by the Norwegian central bank last month said the total cost of each cash transaction — including handling notes and coins in banks — was estimated at 7.1 crowns ($0.92) against only 4.1 crowns per card transaction.
For consumers, abandoning cash is often about convenience, though some are worried the poor, elderly and disabled can lack access to technology and credit, or just prefer notes and coins.
Swedes often make the smallest purchases, such as for chewing gum, with a credit card and can use the Swedish banks’ jointly-developed smartphone app Swish to repay a small debt to a friend. In the Stockholm subway, it is impossible to buy a ticket with cash, while some unemployed people selling street magazines now also accept electronic payments.
In Denmark, “MobilePay” — an app launched by Danske Bank to allow payments via a smartphone — was judged by public radio as the best new word of the year for 2014. It now has 1.8 million users in a nation of 5.6 million people.
But Jarl Dahlfors, chief executive of cash handling firm Loomis, says the cashless trend may have gone too far for “unbanked people” such as many elderly.
