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While the U.S. is still debating about getting rid of the humble penny, Sweden is rapidly moving towards abolishing currency altogether. Though this may sound radical, it is a natural evolution in this digital society where a vast majority of transactions are already being conducted using credit or debit cards.
The Nordic country which ironically was the first European country to introduce banknotes in 1661, has just been working harder to convince its residents that digital payments are a safer alternative to carrying cash.
Over the years, the idea has gained popularity with residents, especially the younger generation that is much more comfortable with technology. Today cash is so shunned that many banks don't even have ATM's and some have stopped handling cash altogether!
Tickets to ride public buses in most Swedish cities can only be purchased via cell phones. Numerous businesses are also moving toward accepting only digital payments. Kids now get their allowances on cards and churches circulate a card scanning machine to solicit donations. Even the homeless that sell street paper to make ends meet, had to start accepting this mode of payment! In fact, cash is such a taboo that bank customers carrying "excessive" currency, are reported to ensure they are not engaged in suspicious activities.
It is estimated that there is currently less than 80 billion Swedish Krona (SEK) in circulation. Though that may sound like a lot, it is a sharp reduction from the 106 billion that was in circulation just six years ago! Moreover, it is believed that just 40% to 60% of the currency is actually being used. The rest is tucked away inside bank safety deposit boxes or home safes.
The officials say the key to the success of their strategy lies in a sophisticated payment technology called SWISH. A collaboration between Sweden and Denmark (that is also trying to go cashless), the mobile payment system allows for real-time transactions between individuals, making the use of digital currency very easy and convenient.
But despite its growing popularity, there are some holdouts to this "radical" idea, They include elderly people as well as those living in rural areas who are still uncomfortable with mobile phones and computers. Also reluctant are the homeless and undocumented workers that would have to depend wholly on government aid if cash was abolished altogether. But the officials are confident that in the very near future, they will be able to convince everyone to move to this safe and more cost-effective payment system.
Sweden is not the only country trying to abolish paper currency and coins. The movement is rapidly gaining traction in Denmark and Finland as well. In 2014, Israel announced a three-step plan to go cashless and just last week the vendors of a popular street in Sydney declared they would cease accepting currency from customers. Whether this sentiment spreads remains to be seen. But one thing is for sure - With increasingly sophisticated payment systems being introduced every day, pulling out cash is rapidly becoming "uncool."
Resources: guardian.com, alphagalileo.org, cbsnews.com