STOCKHOLM — Sweden was the first European country to introduce bank notes in 1661. Now it’s come farther than most on the path toward getting rid of them. “I can’t see why we should be printing bank notes at all anymore,” says Bjoern Ulvaeus, former member of 1970’s pop group ABBA, and a vocal proponent for a world without cash. The contours of such a society are starting to take shape in this high-tech nation, frustrating those who prefer coins and bills over digital money.
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 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.
In Italy – where cash has been a common means of avoiding value-added tax and hiding profits from the taxman – Prime Minister Mario Monti in December put forward measures to limit cash transactions to payments under (EURO)1,000 ($1,300), down from (EURO)2,500 before. The flip side is the risk of cybercrimes. According to the Swedish National Council for Crime Prevention the number of computerized fraud cases, including skimming, surged to nearly 20,000 in 2011 from 3,304 in 2000.
Oscar Swartz, the founder of Sweden’s first Internet provider, Banhof, says a digital economy also raises privacy issues because of the electronic trail of transactions. He supports the idea of phasing out cash, but says other anonymous payment methods need to be introduced instead. “One should be able to send money and donate money to different organizations without being traced every time,” he says. It’s no surprise that Sweden and other Nordic countries are at the forefront of this development, given their emphasis on technology and innovation.
For the second year in a row, Sweden ranked first in the Global Information Technology Report released at the World Economic Forum in January. The Economist Intelligence Unit also put Sweden top of its latest digital economy rankings, in 2010. Both rankings measure how far countries have come in integrating information and communication technologies in their economies. Internet startups in Sweden and elsewhere are now hard at work developing payment and banking services for smartphones. Swedish company iZettel has developed a device for small traders, similar to Square in the U.S., that plugs into the back of an iPhone to make it work like a credit card terminal. Sweden’s biggest banks are expected to launch a joint service later this year that allows customers to transfer money between each other’s accounts in real-time with their cell phones.
Most experts don’t expect cash to disappear anytime soon, but that its proportion of the economy will continue to decline as such payment options become available. Before retiring as deputy governor of Sweden’s central bank, Lars Nyberg said last year that cash will survive “like the crocodile, even though it may be forced to see its habitat gradually cut back.”
Andrea Wramfelt, whose bowling alley in the southern city of Landskrona stopped accepting cash in 2010, makes a bolder prediction: She believes coins and notes will cease to exist in Sweden within 20 years. “Personally I think this is what people should expect in the future,” she says. But there are pockets of resistance. Hanna Celik, whose family owns a newspaper kiosk in a Stockholm shopping mall, says the digital economy is all about banks seeking bigger earnings. Celik says he gets charged about 5 Swedish kronor ($0.80) for every credit card transaction, and a law passed by the Swedish Parliament prevents him from passing on that charge to consumers. “That stinks,” he says. “For them (the banks), this is a very good way to earn a lot of money, that’s what it’s all about. They make huge profits.”
Things I worry about when it comes to a cashless society:
1. How will customers put money in the tip jar if you perform well, artists wont always be able to do a credit card transaction with a tipper at a show, so no tip will be put in tip jar.
2. If you lose your credit rating you wont qualify for a credit card therefore you will not be able to buy anything with your cash if you have any.
3. If you want to give a homeless person some money, who may even be you soon in a cashless society, how will you be able to give him some money as a homeless person cannot take credit cards.
4. When you trade in cash the banks make no money, is it really just another business plan, to make sure the banks make money on every money transaction that takes place on this earth.
5. So maybe the cashless soceity can be linked to the Bible’s prophecy of the mark of the beast as we will have to have a chip either on a card or placed under our skin to survive in the new cashless world.
I am really not qualified to even write about this, but as an average Joe I see trouble coming if America follows the Swedish example. For America is luckily for now still the leader of the free world and as long as America does not follow suit we should still be OK. To me it seems that it is all about whats best for the banks and if the banks rule the world they will eventually succeed in their quest.
I have lived in Norway for almost 3 years. I am ashamed to say that I speak Norwegian almost as well as I speak Klingon.
There are three questions that every Norwegian asks in that first conversation.
Viking: “How do you like Norway?”
Me: “I think it is a wonderful country but I am still struggling with the snow in winter.”Viking: “How long have you been here?”
Me: “Almost 3 years.”
Viking: “But you don’t speak any Norwegian?” (Which is code for “How do you earn a living or are you living off my tax payments??”
Me: “I am a consultant on the Internet helping small business owners in English-speaking countries around the world. I speak English 12 hours each day, so there is not much time to learn Norsk.” (I throw that last word in to show them that I am not totally clueless.”)
The talking ends shortly after. Norwegians have little concept of self-employment. Having an income that follows one from country to country is utterly foreign, like the Finnish. And, I suspect, the concept of any sane person living in Thor’s own country because he actually wants to, beggars understanding. I no longer even mention the white sand in Durban, because they start to get grumpy, as if the big five should be enough for any one country..
I don’t have a business so much as a ‘self-employment’. We tend to confuse the two terms. Business means stature. Self-employment has all the status of a Trabant. It is easy to fail in business. 96% of us do, at least once. We have looked at some of that fallout in the past few emails.
But, self-employment, that is a different mammal altogether. Self-employment harks back to medieval craftsmen moving from town to town. The Internet, of course, means that each ‘town’ on earth sits in an Apple on the desk on my bedroom. One doesn’t ‘close’ self-employment. Rather it ends as one migrates from earthly worm to heavenly butterfly.
I closed a business in 1992. In hindsight it was never ‘my’ business. The banks and the government always had first dibs at any money that came in, followed by the staff. And since I was always more interested in the techie stuff than the money, there was never a lot of money left.
After closing, I just wanted to earn enough to enjoy life, to be able to do some interesting stuff, and to live wherever chance (or maybe a wonderful woman) might take me. My dreams came from an insightful book called “The Sovereign Individual“.
And so I slid into this zero-status form of business structure known as self-employment. Even government is not interested. They want you to employ real people, not yourself. (I think that there is no finer recommendation for any structure.)
Self-employment has very few constraints. Self-employment is something you can do in the haven of your bedroom, in your pajamas. (While on sick leave, if you really, really want to.) And my focus for the next few years was on setting up an income infrastructure that could work anywhere.
My first test into Australia was fun, but a dismal failure portability-wise. The Web wasn’t yet up to the task. (At least, that’s how I comfort myself because it was a very costly test.)
A few years later came the UK, and this was much better. At least, until some dastard stole my pass-port in Cape Town. The UK government decided that stolen documents meant that I must never have had them, and took so long to renew them that I knew it was time to leave. And so it was that the family ended up in Mrs Carruthers’ home town. This move was seamless. I had, so to speak, become a shadow of my former self.
But you can’t do this with a ‘real’ business. It is not portable. The moment it is within the governments radar, the admin load rockets. Even burying the corpse costs a chunk, and involves paper, lawyers, accountants, and courts. We self-employed simply sidle away. In our pajamas.
A few years ago I started sharing these ideas and skills with a few people who were happy to pay more money than I thought I was worth. I extended this into a new community – Global Warriors. And then, the techie demon took over and I got lost in the excitement of Google marketing. As we taught each step, we automated it. This became Marketing Motor, a great way to do marketing online, but not quite what a bunch of folk had signed up for.
I am going to fix that by offering a twelve month mentorship in an unusual way. Why?To transfer everything I know about earning an income online to you, by this time next year. There are no sacred cows, and we will discuss each aspect in enough depth for you to be confident that you can take it on. It’s all common sense when you see through the hype.
The pace will be comfortable, but over the year we will cover more than you can imagine.
The plan is, over the space of a year, to take just two hours out of your week, on a Tuesday evening, and to transfer everything that I know to you. By the end of the year you will be in the space where you know everything that you need to be able to earn enough income to survive online, and live in Johannesburg or Cape Town or Knysna, or Edinburgh, or Perth, or Oslo.
If you want to know more, please join me here at 8pm SA Time, Tuesday evening, March 27. In order to work through this program with me you will need reasonable speed internet (better than 300K), either Windows or Mac, and the ability to laugh a lot.
All the best