The Björn Ultimatum: Two Men Fight Over Sweden’s Move to a Cashless Economy by Mallory Pickett covers both sides of the battle to get rid of cash altogether. This would be a good article for students to read and debate. As a Swedish-American who visits Swedish relatives regularly, I’ve seen a number of innovations like this that start there before being adopted in the US. @wired, May 2016 pp. 102-111.

You Rob Banks Because That’s Where the Money Is.

• On April 13, 2013, a man walked into the Stockholm branch of Skandinaviska Enskilda Bankan and announced that “this is a robbery, I want cash.” The staff calmly explained that there was no cash on the premises. The robber was then pointed at a sign that read “This is a Cash-Free Location.” What the robber had not realized was that Sweden was at the forefront of a global economic shift to where cash is increasingly unnecessary and even unwanted. Americans are about half way as 46% of their transactions feature cash as credit card use and mobile payment options expand. Even with concerns about data breaches and identity theft, a world without cash seems inevitable, if not imminent.

In Sweden Tomorrow Happens Yesterday

• With a population half the size of Los Angeles (10 Million) and a sophisticated IT structure, Sweden can pilot-test new developments, new systems, and new futures almost overnight. Ironically, 350 years ago it became the first country to issue paper money. Now it’s on its way to be the first to phase it out altogether. There are Swedes, however, that are fighting this trend. At the heart of this story are two men on opposite sides both named Björn. The first is Björn Ulvaeus, one of the B’s in the famous pop group named ABBA. He is also half the brains behind the Mama Mia franchise that has made him a very rich man. In 2008, his son’s residence was robbed. Ulvaeus knew that the stolen items would be sold somewhere for cash so he asked himself, “what if there wasn’t any paper money?”

Cash is Anonymous and Crime Requires Cash

• The criminal economy depends on the anonymous, untraceable nature of cash. That explains why a lot of the cash in the world is unaccounted for. The World Banks estimate that about a third of the cash in most countries circulates underground. Take it away and thieves and drug dealers have no way to do business, and the shadow economy collapses. Ulvaeus has written widely on the subject and has gone so far to make the ABBA Museum in Stockholm a cash-free zone. As safe as Sweden is, it is always looking for ways to increase safety.

Just Swish It

• About the same time the ABBA Museum opened, Swedish banks created the Swish mobile phone app. This lets ordinary people transfer money to each other by using their mobile phones. All you need is someone’s phone number. About half of the population is using it so far as are small businesses and even homeless people. Cash transactions fell from 40% in 2010 to 20% in 2014 and more than half of bank branches do not deal in cash. Bank robberies have fallen 70% during that timeframe. Muggings and robberies have dropped as there isn’t much incentive to rob a person or a business that doesn’t have any cash. Tax revenues are also soaring. Ulvaeus hopes other countries will follow Sweden’s example and imagines how great going cashless would be for countries like Greece.

Unexpected Consequences

• A number of odd things have happened. There has been a claim of e-mugging, which happens when someone forces you to Swish them some money, which is easy to trace. Tourists picking up cash at the airport have complained about not being able to spend it. ATM vendors are getting so little business that they are removing many of them. People depositing cash where they still can are viewed with suspicion. Tellers question people with cash and this can be a problem for churches. Hacking is more of an issue than ever. There have been some issues, but nothing major yet.

Björn Number Two

• On the opposite side of the cashless argument is Björn Eriksson, the former chief of Interpol. At 71, he is the same age as Björn Ulvaeus. He claims that the move to a cashless society is being pushed by the banks and credit card companies rather than the people. He is also concerned about corruption, deceit, and security risks. Cards and apps with their hidden fees make banks money whereas cash transactions do not. In fact, cash costs banks money as they have to count, handle, transport, guard, and count it again.

Swedish Nature

• Swedes are not a cynical people. They like technology and trust their government and institutions. Most of them have been happy to renounce cash and for some, the changeover has hardly been noticeable. The seeming thoughtlessness of many Swedes concerns Eriksson. Last year he started Cash Uprising in order to save cash. His supporters are mostly rural, small businesses, and retirees. These are the people who find the disappearance of cash to be inconvenient. People who sell produce, for example, end up with cash their local back won’t take. When they drive to the nearest bank that does take cash, there are limits to what they can deposit at once. For some, the change happened so fast that they couldn’t plan for it.

The Downside of No Cash

• Thanks to Eriksson, the Swedish parliament may vote on a bill to require banks to provide cash services and the head of Sweden’s central bank is on his side. The biggest losers in a cashless society would be the security guards that are hired to protect cash. There is also the issue that when you spend cash, you don’t have to give up personal information. Although muggings and thefts are down, identity theft has more than doubled, and this only counts the incidents reported to the police. Cyber criminals are more active and many consumers have yet to learn how to protect themselves. Eriksson believes that banks are hiding the fact that at this stage even they have lost a lot of money.

The US is Sort of Catching Up

• High profile hacks of the magnetic strips on the back of credit cards at places like Target and Home Depot have resulted in American retailers switching to chip readers. The chips make transactions more secure and the Swedes have had them for more than a decade. When I was there in 2010 I couldn’t even buy gas for my cousin’s car as my card lacked a chip. When I returned in 2014 I made sure I had a chip, but getting it took some effort as my financial advisor didn’t even know what it was. The US version of Swish is also in the works, but it remains to be seen how it will be received. The US also has a ways to go in regard to consumer protection. For now, transactions in the US are stalled at about 50% cash. Don’t be surprised if many Americans cling to their cash with more tenacity than the typical Swede.

My Cousins Weigh In

• Cousin Peter Stockholm (40’s): Lot’s of people are using Swish, both when it comes to transferring between private persons and for smaller cash transfers at markets, cafés, and events. Today we went to an event for kids and all payments (hot dogs, entrance fees, parking, etc) were possible to via Swish. Most smaller stores accept it and a most prefer it. Being Swedish means that you count on the government to take care of you. I like it a lot, it is very convenient and I never lack cash thanks to Swish. I am quite sure you need a population that blindly trusts the authorities. It would be harder for Greece. October last year we got new bills, 200 SEK, 50 SEK and 20 SEK. I still haven’t seen the 200 or the 50 so that’s how often I see cash these days.
• Cousin Martin Borås Western Sweden (40’s): Everybody is using Swish here. It’s a great service that gained millions of users very fast. It’s very common if two friends lunch together, one paying the bill and the other “Swishes”‘ the debt. Swish is also used by all small sports clubs when selling candy, drinks, and hot dogs at games. In Norway, they have a similar service called Vipps.
• Cousins Morgan and Kristina Borås retired (70’s): We use Swish as often we can. It’s a perfect way to pay for what we buy and also to transfer money to others. I think the banks like it too as they always try to earn/steal as much money they can. Unfortunately, some older people are not trusting Swish and still use paper money. I´m sure Swish will take over, but it takes a time to have some people accept it.

Conclusion

• Ultimately, Sweden’s two Björns want the same thing: a safer society. They are not so much rivals and complements. Thanks to their efforts, the US can look to the Swedes for guidance. I have been traveling to Sweden periodically since 1980. Every time I go I see innovations that come to the US in time. In 2010 I helped my cousin take some items to the recycling center. I was amazed at how hi-tech it was along with the degree they expected ordinary people to sort and recycle just about everything. This month I helped my sister clean out her house, which required many trips to the local recycling center. What I saw was an operation that looked a lot like Sweden six years ago. Just like we need to look to places like Finland for innovations in education, we need to look to Sweden for innovations in just about anything. As a Swedish-American, I know my bias is showing, but at least you know where I’m coming from. Skål!

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