Sweden leads move to cashless mobile economy

Sweden leads move to cashless mobile economy

Summary: Sweden is moving towards a cashless economy with card transactions instead of cash. Robberies are down and bank processes are more efficient. But not everyone is happy with the change.

TOPICS: Banking, iPhone, iPad

Sweden has been moving towards a cashless economy for several years now, encouraging transactions to be made by cards instead of money. Robberies are down and bank processes are more efficient without cash to manage. But not everyone is happy with the change.

Buses no longer accept cash after a series of robberies.  Now, in order to get on the bus, you can use a prepaid ticket or cell phone text message.  Card payments are now the norm.

Credit and debit cards dominate payment in Sweden and in most of the developed world. In Iceland and the US, 93 per cent of retail transactions were non-cash. In Sweden it is 97 per cent.

Some businesses have stopped accepting cash, preferring electronic only methods.  Other businesses have not fully embraced the credit and debit revolution, preferring only to use cash.

Mobile opportunity

Mobile payment initiatives are bringing new ways of cashless payment across markets. They use mobile devices to facilitate cashless transactions.

iZettle, launched in Sweden, takes payments on the go from an iPhone or iPad. Serve, from American Express lets you receive payment through Facebook.

In Africa, Paypass tap and go payment chips from Mastercard enables payments through Near Field Communication (NFC) on your mobile phone.

The mobile payments start-up Square received a cash investment from Visa last year. Square enables small businesses, which traditionally accept only cash, to accept card payments via Android, iPhone and iPad.

Privacy and security

The grey market -- where goods and cash is exchanged but not recorded defeats the tax man, and leaves no audit trail. With the move towards trackable, auditable, online cash payments would the grey market disappear completely?

The risk of payment systems falling victim to cybercrime attacks is an issue. Privacy is an issue. Maintaining security of the transactions is a huge challenge for payment operators. But, in the long term, it seems to be the only way forward.

More and more transactions are carried out online, electronic payments are the norm in most countries.  Cards can be used for more than just payment -- such as tracking your fitness via community gaming or clocking you in and out of your workplace.

But would we survive without the green and folding bills in our wallet? Would bank robberies and muggings actually reduce as they have in Sweden?

After all, what is the point robbing a bank or mugging someone if there is no cash there to steal?

Related content:

Topics: Banking, iPhone, iPad

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • Gee, banks love this

    Now they get to charge transaction fees everytime you use your debit card, or higher interest rates if you use credit.

    Isn't that 'wonderful'.
    • Everyone but me should work for free!

      What, you were expecting the banks to use slave labor to run their IT shops? Where do you think these transactions get processed?
      Robert Hahn
      • Indeed, but ...

        Since CPUs do the work, the charge should be <$0.00000001/transaction.
      • But if you use cash...

        ...you don't have to deal with any of that. This is nothing more than a racket to fatten up banks.
      • Cash

        I prefer cash myself.
        I don't have any credit cards.

        I guess that makes me an "Enemy of the State". ;)
      • Or at the very least...

        ...an enemy of @Robert Hahn

  • One funny thing...

    ...is even if paying with cards they still use equalization methods. With a price of ie 5.37 you should be able to pay just 5.37, not leveling up or down. Just think it's funny and quite old philosophy.

  • One big difference

    In Sweden and other nations across the pond, they have [b]much[/b] stronger protections on debit transactions. Here in the US, the laws are very much skewed in favor of banks, to limit their losses.
    • The world is out to get you. But not me.

      Speak for yourself. I'm in the U.S., and I have zero -- count 'em -- zero exposure on debit card losses.
      Robert Hahn
      • I now believe only idi0ts use a debit card

        Gee, let's have an open pipeline into your bank account!

        Knock on wood, @Robert Hahn