How much change do you have in your pocket? If the answer is none, you may be in Sweden. According to a new report, Sweden and their Scandinavian neighbours are quickly moving towards a completely cashless society. The report reveals that 80% of all transactions in Sweden are made either online or with debit/credit cards. The buses don’t take cash, taxis assume that you’re paying by card and coffee shops will present you with a card machine when you order your daily extra-shot decaf bonsoy piccolo.
The benefits of digital money are numerous: reportedly, Sweden will benefit from improved security for both staff and customers, a dip in cash-handling costs (estimated at $1.2 billion) and a reduction in armed robberies. Across the Atlantic, Canada announced in early 2013 thatno more new Canadian dollars will be introduced into circulation following a report by PayPal Canada that 56% of Canadians prefer digital wallets to cash. Though these benefits might look promising, the question is, why aren’t more countries moving towards a cashless society?
There are still advantages to carrying wads in your wallet. Using debit cards or other forms of digital payment can be too easy, lacking the pain associated with parting with hard-earned physical krona, ultimately encouraging over-spending. Italy and Greece benefit from having a strong cash culture for reasons highlighted by Friedrich Schneider, expert in underground economics; “If people use more cards, they are less involved in shadow economy activities”. Cards are traceable and often attract more tax, making cash a more attractive option for some.
It seems a cashless world might be closer than we think. However, when currency as beautiful as Norway’s newly-designed notes are still being introduced, we will always feel the need to make it rain with cold hard cash.