The Guardian Nordic countries point way to cashless future as US struggles with chip-and-pin
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, home of music streaming firm Spotify and the Candy Crush mobile phone game, 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. Another app allow drinkers to buy beers in a bar without queuing.
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.
Mike Shabwan, selling flowers on a Stockholm square, said sales had risen by 10% since he started use the Swedish service iZettle in his smartphone to accept card payments.
“And it is also cheaper and easier for me because the money comes directly into the bank,” he said.