My New Year’s resolution for 2013 is to not ever touch Swedish money again. I’ve found these past few months that I no longer need cash in Sweden, as practically every single transaction can be done electronically, no matter how small the amount. The advantages to me speeding along the arrival of a wholly cashless future are many:
- Coins are heavy yet worth little. I already give far more to charity per day than the value of the coinage I would willingly keep to avoid being shortchanged in my transactions.
- Bills weigh less, but are worth more, so if I lose them or have them stolen their value to me is forever destroyed. And when I travel abroad, they need to be exchanged before I can access their value. My debit card is better on both counts.
- Transfers between Swedish bank accounts can be done online, and are instantaneous and free. Ask a Swede about cheques and they will draw a blank, figuratively.
- All Swedish merchants I’ve used in the past year take bank cards, because all Swedish points of sale must report back to the tax authorities, so taking cash just to avoid paying taxes is a nonstarter (and frowned upon in any case — Swedes ask for the receipt). This is why Sweden is Sweden and Greece is Greece.
- Security and identity fears have been effectively resolved with the recent nationwide introduction of the BankID and Mobile BankID system. I can now authorize and sign a whole range of interactions via a desktop app or a mobile app. BankID connects me securely to banks, pensions funds, insurance corporations, tax authorities and anyone else willing to join. These services are often available via mobile apps that connect seamlessly to the BankID app. (Here’s the state pension fund’s app; here’s the tax authority’s app.)
- Innovative cardless payment solutions are evolving. Just in the past month, I’ve started using two:
- Swish is an initiative by Swedish banks that lets you connect your bank account to your mobile phone number and then send to or receive money just by using phone numbers. There’s no more need to deal with bank account numbers.
- SEQR has just started being used by my local supermarket to allow payments via mobile phone. When the checkout chick presents me with my grocery bill, I tell him I want to pay with SEQR, and then scan that register’s unique QR code. While the register sends SEQR the payment amount, I send SEQR the QR code, which authorizes payment. It’s about twice as fast as paying with my debit card, because the service does not have to check with my bank to see if my account has money on it. Instead, it gives me a SEK 5,000 (USD 770) advance with which I can make purchases, and I get the bill at the end of the month.
Both apps are getting glowing reviews, but we’re still short of the Holy Grail. SEQR and competitors will get even better when some form of near-field communication technology gets widely adopted in the next few years.
My New Year’s resolution is not for everyone. Right now, getting a BankID to work requires a few too many tech-savvy steps for old people to really get a hang of it. Either it will get easier, or cash will be around until they die off. One bank at least continues to see facilitating cash transactions as a service for this demographic.
As for other people in other countries, how soon they can follow Sweden’s example depends on a couple of national traits. Banks in Sweden are not averse to cooperation, in part because they are so well-regulated that they don’t have to operate in some kind of Hobbesian zero-sum scramble for customers. They tend to compete on services, but collaborate on platforms. Also, Swedes have a national genius for public trust in their government, and it is by and large justified. I’m not sure I’d be willing to give up the anonymous payment option that cash offers anywhere outside Scandinavia right now. In any case, anonymous cashless payment technologies are riding to the rescue.
[BONUS REASON I FORGOT TO MENTION: Banks like SkandiaBank have apps that let you datamine your own expenditures by type, establishment and even by individual component purchases. This certainly appeals to our inner geek but it can also more easily motivate behavior modification — for example, the micro-savings app lets you set savings goals by encouraging you to forgo small daily expenses.]