Towards the end of cash

Sweden was the first country to introduce paper banknotes, back in 1661.  And now it is on the verge of being the first country to eliminate cash altogether:

In most Swedish cities, public buses don’t accept cash; tickets are prepaid or purchased with a cell phone text message. A small but growing number of businesses only take cards, and some bank offices — which make money on electronic transactions — have stopped handling cash altogether.

“There are towns where it isn’t at all possible anymore to enter a bank and use cash,” complains Curt Persson, chairman of Sweden’s National Pensioners’ Organization.

He says that’s a problem for elderly people in rural areas who don’t have credit cards or don’t know how to use them to withdraw cash.

The decline of cash is noticeable even in houses of worship, like the Carl Gustaf Church in Karlshamn, southern Sweden, where Vicar Johan Tyrberg recently installed a card reader to make it easier for worshippers to make offerings.

“People came up to me several times and said they didn’t have cash but would still like to donate money,” Tyrberg says.

Bills and coins represent only 3 percent of Sweden’s economy, compared to an average of 9 percent in the eurozone and 7 percent in the U.S., according to the Bank for International Settlements, an umbrella organization for the world’s central banks.

Three percent is still too much if you ask [ABBA's Bjoern] Ulvaeus. A cashless society may seem like an odd cause for someone who made a fortune on “Money, Money, Money” and other ABBA hits, but for Ulvaeus it’s a matter of security.

After his son was robbed for the third time he started advocating a faster transition to a fully digital economy, if only to make life harder for thieves.

“If there were no cash, what would they do?” says Ulvaeus, 66.

The Swedish Bankers’ Association says the shrinkage of the cash economy is already making an impact in crime statistics.

The number of bank robberies in Sweden plunged from 110 in 2008 to 16 in 2011 — the lowest level since it started keeping records 30 years ago. It says robberies of security transports are also down.

“Less cash in circulation makes things safer, both for the staff that handle cash, but also of course for the public,” says Par Karlsson, a security expert at the organization.

The prevalence of electronic transactions — and the digital trail they generate — also helps explain why Sweden has less of a problem with graft than countries with a stronger cash culture, such as Italy or Greece, says economics professor Friedrich Schneider of the Johannes Kepler University in Austria.

“If people use more cards, they are less involved in shadow economy activities,” says Schneider, an expert on underground economies.

Do you think eliminating cash entirely in favor of all-electronic transactions would be a good idea?

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • Eric Brown

    I don’t think totally electronic is ideal, but moving more and more towards electronic is good. I also think we should get rid of $1 bills and instead introduce $1 and $2 coins. That was one of the best things about the Euro – you could have a bit of change that could actually cover small incidentals… larger purchases handled electronically. I’d dig it – but I’m also part Swede. And if the Swedes say that there’d be less pillaging if there was less actual cash, maybe we should listen to the Vikings on that topic.

  • Eric Brown

    I don’t think totally electronic is ideal, but moving more and more towards electronic is good. I also think we should get rid of $1 bills and instead introduce $1 and $2 coins. That was one of the best things about the Euro – you could have a bit of change that could actually cover small incidentals… larger purchases handled electronically. I’d dig it – but I’m also part Swede. And if the Swedes say that there’d be less pillaging if there was less actual cash, maybe we should listen to the Vikings on that topic.

  • HC

    Instead of cash thieves, we switch to “hacker” thieves.

  • HC

    Instead of cash thieves, we switch to “hacker” thieves.

  • SKPeterson

    Contra Eric @ 1, as a Swedish-American, I have to emphatically say that this is a generally bad, bad idea. Convenient, maybe, but, if I can hyperbolize for a moment, a gateway to much mischief or downright evil. Perhaps it is my remembrance of William Gibson novels, but such a move gives the government (and evil corporations :) ) just one more means to take and track more and more. Once all your money is electronic, how long will it be before your assets can be easily frozen without warning or upon a flimsy pretext? Or, say, seized Argentina-style? Or given a few extra, hidden taxes, er, fees? So, now, we can track you, we can monitor what you spend and on what, and with whom. All from the convenience of our Apple/DOJ/IRS/Google office desktops.

    Bye, bye privacy! I don’t need you in this brave, new convenient world.

  • SKPeterson

    Contra Eric @ 1, as a Swedish-American, I have to emphatically say that this is a generally bad, bad idea. Convenient, maybe, but, if I can hyperbolize for a moment, a gateway to much mischief or downright evil. Perhaps it is my remembrance of William Gibson novels, but such a move gives the government (and evil corporations :) ) just one more means to take and track more and more. Once all your money is electronic, how long will it be before your assets can be easily frozen without warning or upon a flimsy pretext? Or, say, seized Argentina-style? Or given a few extra, hidden taxes, er, fees? So, now, we can track you, we can monitor what you spend and on what, and with whom. All from the convenience of our Apple/DOJ/IRS/Google office desktops.

    Bye, bye privacy! I don’t need you in this brave, new convenient world.

  • http://www.utah-lutheran.blogspot.com Bror Erickson

    Very bad idea. I mean how our Johns supposed to pay prostitutes if there is no cash?
    no pillaging? right. people don’t steal clothes and jewelry.
    I don’t like it.

  • http://www.utah-lutheran.blogspot.com Bror Erickson

    Very bad idea. I mean how our Johns supposed to pay prostitutes if there is no cash?
    no pillaging? right. people don’t steal clothes and jewelry.
    I don’t like it.

  • Tom Hering

    Cash is freedom, because cash gives you the ability to hide your money, as well as the ability to conduct completely private transactions.

    Imagine, say, Jews escaping from Nazi Germany, and using their phones to bribe guards and officials.

  • Tom Hering

    Cash is freedom, because cash gives you the ability to hide your money, as well as the ability to conduct completely private transactions.

    Imagine, say, Jews escaping from Nazi Germany, and using their phones to bribe guards and officials.

  • Dr. Luther in the 21st Century

    I am not a big fan of switching to cashless. Digital fund transfers are easy to track and they are easy to hack. Besides what would all the wannabe gangstas do for their facebook poses? So I don’t see it as a safer option.

    I like using electronic means as I was spoiled by the ease of use during my university days, but I really like the option of cash. Cash has greater flexibility. Also, has anybody considered how this would adversely effect the second hand market and young adults who are trying to earn money via traditional youth endeavors? Or do they expect the neighbor girl who watches the kids while you and your spouse are out to carry a card reader?

  • Dr. Luther in the 21st Century

    I am not a big fan of switching to cashless. Digital fund transfers are easy to track and they are easy to hack. Besides what would all the wannabe gangstas do for their facebook poses? So I don’t see it as a safer option.

    I like using electronic means as I was spoiled by the ease of use during my university days, but I really like the option of cash. Cash has greater flexibility. Also, has anybody considered how this would adversely effect the second hand market and young adults who are trying to earn money via traditional youth endeavors? Or do they expect the neighbor girl who watches the kids while you and your spouse are out to carry a card reader?

  • http://fivepintlutheran2.wordpress.com/ David Cochrane

    I like my debit card. If it gets lost or stolen all that one has to do is call up, have it closed, keep track of transactions and get a new card with new number. Try doing that with our so called cash.

    Bror, the working women would need to invest in portable pos technology. Or pay them in jewelry etc. :P

  • http://fivepintlutheran2.wordpress.com/ David Cochrane

    I like my debit card. If it gets lost or stolen all that one has to do is call up, have it closed, keep track of transactions and get a new card with new number. Try doing that with our so called cash.

    Bror, the working women would need to invest in portable pos technology. Or pay them in jewelry etc. :P

  • http://www.facebook.com/mesamike Mike Westfall

    Well, the babysitter will just have to take her pay in yams, or chickens or puka shells, or Hudson Bay Company blankets…

  • http://www.facebook.com/mesamike Mike Westfall

    Well, the babysitter will just have to take her pay in yams, or chickens or puka shells, or Hudson Bay Company blankets…

  • Patrick Kyle

    “Do you think eliminating cash entirely in favor of all-electronic transactions would be a good idea?”
    No.

    In addition to the privacy concerns stated above, banks and government will not be able to resist charging ‘small fees’ on each transaction that will grow ever larger. You will be charged additional fees to buy food, clothing and other basic necessities. Banks love this idea, and they have already proven they are willing to fleece their customers. This will give them the ultimate tool to do so.

  • Patrick Kyle

    “Do you think eliminating cash entirely in favor of all-electronic transactions would be a good idea?”
    No.

    In addition to the privacy concerns stated above, banks and government will not be able to resist charging ‘small fees’ on each transaction that will grow ever larger. You will be charged additional fees to buy food, clothing and other basic necessities. Banks love this idea, and they have already proven they are willing to fleece their customers. This will give them the ultimate tool to do so.

  • Jerry

    You left out the part where tech crimes are way up in Sweden…

  • Jerry

    You left out the part where tech crimes are way up in Sweden…

  • DonS

    Besides the part where the government can track every transaction you make, which is OK until your government opposes your liberty, there is the issue of natural disasters, such as large-scale hurricanes, tornadoes, earthquakes, etc. Electronic transfers don’t work so well when the power is out for an extended period of time, or the data banks have been damaged or destroyed. Here in California, part of earthquake preparedness is having a stash of cash to last three or four days when the “big one” comes.

    Don’t let the government talk you out of using cash, at least some of the time. It’s OK if they don’t know everything about you.

  • DonS

    Besides the part where the government can track every transaction you make, which is OK until your government opposes your liberty, there is the issue of natural disasters, such as large-scale hurricanes, tornadoes, earthquakes, etc. Electronic transfers don’t work so well when the power is out for an extended period of time, or the data banks have been damaged or destroyed. Here in California, part of earthquake preparedness is having a stash of cash to last three or four days when the “big one” comes.

    Don’t let the government talk you out of using cash, at least some of the time. It’s OK if they don’t know everything about you.

  • rlewer

    We (or the store we buy from) are already paying fees for credit card and electronic spending. These companies would just make more money from us in addition to being able to track everything we do. They don’t make money when we pay cash. Do you really wonder why they are pushing electronic transfers?

    Besides, how could you save your money by hiding your credit card under your mattress? All your “money” would have to be deposited with some institution to be usable.

  • rlewer

    We (or the store we buy from) are already paying fees for credit card and electronic spending. These companies would just make more money from us in addition to being able to track everything we do. They don’t make money when we pay cash. Do you really wonder why they are pushing electronic transfers?

    Besides, how could you save your money by hiding your credit card under your mattress? All your “money” would have to be deposited with some institution to be usable.

  • http://www.toddstadler.com/ tODD

    Along with SK (@3) and others, I see the potential for mischief here — mainly in the form of corporations and government messing with your money or your ability to access it. Though I had to laugh at this:

    Once all your money is electronic, how long will it be before your assets can be easily frozen without warning or upon a flimsy pretext?

    Yes, “once” that happens … I mean, who here has a significant amount of their assets in currency? Practically speaking, my assets are already all electronic. But I can at least convert those funds into cash at will. And based on the way the last two administrations have taken things, I’m pretty sure all it would take is being added to some clandestine list “for security reasons” to have my current assets frozen. I don’t think it’s likely that will happen to me, but that’s because I’m a good citizen. Right?

  • http://www.toddstadler.com/ tODD

    Along with SK (@3) and others, I see the potential for mischief here — mainly in the form of corporations and government messing with your money or your ability to access it. Though I had to laugh at this:

    Once all your money is electronic, how long will it be before your assets can be easily frozen without warning or upon a flimsy pretext?

    Yes, “once” that happens … I mean, who here has a significant amount of their assets in currency? Practically speaking, my assets are already all electronic. But I can at least convert those funds into cash at will. And based on the way the last two administrations have taken things, I’m pretty sure all it would take is being added to some clandestine list “for security reasons” to have my current assets frozen. I don’t think it’s likely that will happen to me, but that’s because I’m a good citizen. Right?

  • http://www.toddstadler.com/ tODD

    That said, I still think DLit2C’s statement (@6) was over the top:

    Digital fund transfers are easy to track and they are easy to hack.

    “Easy”? Really? So the media’s just utterly failing to report on all the digital transfers that have been “hacked”? Or the criminals are just lazy and don’t even want to steal money in such an “easy” way?

    He also said:

    Cash has greater flexibility.

    What does that mean? It’s not so flexible if you run out of it when you’re at a store.

    Finally, he asked:

    Or do they expect the neighbor girl who watches the kids while you and your spouse are out to carry a card reader?

    If she has an iPhone, she can carry a card reader in her purse. Just 2.75% per transaction, so expect her to charge $10.28 now per hour, instead of $10.

    Oh, and Jerry (@10)…

    You left out the part where tech crimes are way up in Sweden…

    [citation needed]

  • http://www.toddstadler.com/ tODD

    That said, I still think DLit2C’s statement (@6) was over the top:

    Digital fund transfers are easy to track and they are easy to hack.

    “Easy”? Really? So the media’s just utterly failing to report on all the digital transfers that have been “hacked”? Or the criminals are just lazy and don’t even want to steal money in such an “easy” way?

    He also said:

    Cash has greater flexibility.

    What does that mean? It’s not so flexible if you run out of it when you’re at a store.

    Finally, he asked:

    Or do they expect the neighbor girl who watches the kids while you and your spouse are out to carry a card reader?

    If she has an iPhone, she can carry a card reader in her purse. Just 2.75% per transaction, so expect her to charge $10.28 now per hour, instead of $10.

    Oh, and Jerry (@10)…

    You left out the part where tech crimes are way up in Sweden…

    [citation needed]

  • http://www.bikebubba.blogspot.com bike bubba

    Regarding the invention of counterfeit, I mean paper, money, wasn’t that the Chinese several centuries before the Swedes?

    Count me agreed that at some point, it is highly desirable that there be a form of currency which the government does not control.

  • http://www.bikebubba.blogspot.com bike bubba

    Regarding the invention of counterfeit, I mean paper, money, wasn’t that the Chinese several centuries before the Swedes?

    Count me agreed that at some point, it is highly desirable that there be a form of currency which the government does not control.

  • Rich Shipe

    I think it is a good idea. I’m nearly fully cash free.

    One thing I’ve started to wonder though is if we went to cash free could we also fully privatize money? I’m no economist but have started to wonder if it is possible. I know there was a day when banks would issue notes that were like cash. They were as good as the name and confidence you had in the bank. But it presented major problems in those days and they needed something more centralized to smooth out the transaction process. But I wonder if technology makes all those old problems go away? What if a bank offered digital notes and backed them with something you had confidence in like gold? If your bank did that with your savings you’d be doing really well right now. Not sure but I’m wondering if this might be a way to also force governments into the same marketplace that the rest of us have to perform in. Who would loan our government money if it couldn’t print at will but had to back its borrowing with something real?

    Any thoughts?

  • Rich Shipe

    I think it is a good idea. I’m nearly fully cash free.

    One thing I’ve started to wonder though is if we went to cash free could we also fully privatize money? I’m no economist but have started to wonder if it is possible. I know there was a day when banks would issue notes that were like cash. They were as good as the name and confidence you had in the bank. But it presented major problems in those days and they needed something more centralized to smooth out the transaction process. But I wonder if technology makes all those old problems go away? What if a bank offered digital notes and backed them with something you had confidence in like gold? If your bank did that with your savings you’d be doing really well right now. Not sure but I’m wondering if this might be a way to also force governments into the same marketplace that the rest of us have to perform in. Who would loan our government money if it couldn’t print at will but had to back its borrowing with something real?

    Any thoughts?

  • formerly just steve

    Dr Luther, #6, young people lack the proper training to babysit without a permit. Furthermore, who knows what they could be putting in the lemonade at that corner stand. As long as we have regulations covering every conceivable area of commerce, there’s no reason not to go cashless. Especially if you live in a country where parents don’t even retain the right to school their children.

  • formerly just steve

    Dr Luther, #6, young people lack the proper training to babysit without a permit. Furthermore, who knows what they could be putting in the lemonade at that corner stand. As long as we have regulations covering every conceivable area of commerce, there’s no reason not to go cashless. Especially if you live in a country where parents don’t even retain the right to school their children.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    Nope, can’t do it. Too many federal jobs would be eliminated.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    Nope, can’t do it. Too many federal jobs would be eliminated.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    @13

    I see the potential for mischief here — mainly in the form of corporations and government messing with your money or your ability to access it.

    Interesting. Prompted me to think of how the government encourages the highest velocity of money possible. It seems the main effect would be psychological. That is people will spend more electronically than they will in cash. That may be part of why some popular debt reduction programs teach people not to use credit cards and use cash only as well as write a budget etc.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    @13

    I see the potential for mischief here — mainly in the form of corporations and government messing with your money or your ability to access it.

    Interesting. Prompted me to think of how the government encourages the highest velocity of money possible. It seems the main effect would be psychological. That is people will spend more electronically than they will in cash. That may be part of why some popular debt reduction programs teach people not to use credit cards and use cash only as well as write a budget etc.

  • fws

    cashless society probably represents the greatest threat to freedom there is.
    it will define the word “totalitarian” i used to do audits as a CPA. you know EVERYTHING about a person looking at where they spend their money.

    that is alot of power to give up to whom?

  • fws

    cashless society probably represents the greatest threat to freedom there is.
    it will define the word “totalitarian” i used to do audits as a CPA. you know EVERYTHING about a person looking at where they spend their money.

    that is alot of power to give up to whom?

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