The End of Cash?


Can we ever get rid of cash altogether? Is it practical? Or desirable? What would be the full ramifications of such a decision? After all, all Western countries still use cash: even they haven’t they gotten rid of it in the Internet age. Or is it just a matter of time?

To analyze the prospect, one should look at Sweden, a country that has gone quite some distance in getting rid of cash. Not the full distance of eliminating cash, but much farther than any other country. So what’s been the upside and downside of their decision?

In most Swedish cities, for example, public buses don't accept cash; tickets are prepaid or purchased with a cell phone text message. One can almost immediately see the downside of that: what if you are a visitor to the country? How would you ride the bus? I don’t know how many foreigners visit Sweden, but this would surely be a problem in tourist centers like the US, Paris and Rome.

Several Swedish banks refuse to deal in cash. That’s because they make more money on electronic transactions. Many Swedes, specially the older generation, not all whom are comfortable with credit cards, don’t like the situation at all.

Even a few Swedish churches stopped accepting cash donations (of course, they still want your money, so they installed card readers). Downside: now you can’t say that you’d like to donate but are not carrying enough cash at the moment! Keep that in mind if you ever visit a Swedish church.

Muggings have reduced, because fewer people carry cash. So have bank robberies. Tax evasion and corruption is way lower than, say, Italy or Greece (Of course, that doesn’t say very much). On the other hand, cybercrimes have increased, but the overall effect has been positive.

Also, there is now a digital trail around all your transactions and the anonymity associated with cash transactions is vanishing. And everyone can think of some situations where they’d like their transactions to remain anonymous, not all of which involve illegal activities.

And because Sweden is so much farther down the cashless road than other countries, its banks are planning to launch a joint service soon that allows customers to transfer money across accounts in real-time with their cell phones.

Kind of ironic that the country’s whose band, ABBA, came up with the hit song, "Money, Money, Money" has gone so far to get rid of cash!

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