Around the world, cards and apps are the default way to pay - but nowhere is the transition away from cash more obvious than in Sweden. The Bank of Sweden notes that the amount of cash in circulation in the country has halved since 2007 .
Authors
- Moa Petersén
Associate Professor in Digital Cultures, Lund University
- Lena Halldenius
Professor of Human Rights Studies, Lund University
Part of this is due to a unique Swedish law that prioritises "freedom of contract" above any legal requirement to accept cash. In other words, it is up to businesses - including banks - whether they take cash. Public transport, stores and services typically do not accept cash as payment, and there is no infrastructure for paying bills over the counter.
The transition to cashlessness accelerated when a group of banks created the mobile payment app Swish in 2012. By 2017, Sweden was using less cash than other European countries. Today, more than 80% of the population has a Swish account.
For most Swedes, the cashless economy is swift and convenient. As long as you have a bank account and can access the technology, you probably live a cashless life already. But for the few people who still depend on cash, life is getting harder.
Our recent research how this affects the worst-off groups in Sweden's cashless society. Our interviewees live in poverty-induced cash dependence , meaning they rely on cash payments because they are unbanked, lack credit or cannot afford digital technology.
While it is difficult to measure just how many people depend on cash, older people, particularly, are struggling to pay bills digitally.
Some of those we interviewed are homeless or have mental health issues. Others live on a very low income. The obstacles they face are both practical and cultural. They feel like delinquents, undervalued and locked out of participating in much of daily life.
Being cash-dependent in Sweden
If cash is the only money you have or the only money you can manage without help, you are confined to "cash bubbles". Cash works like a local currency, isolated from the rest of the economy.
In the cash bubble, you can buy necessities and go to no-frills cafes, but you can't pay for parking and you can't pay bills without help. Volunteers at local community groups told us that they spend most of their time doing people's banking for them.
A Ukrainian refugee, who can't get a bank account because of their migration status, worried about a bill from the local health clinic that they had no technical means of paying.
Homeless people who sleep in cars can't use the cashless parking meters, so an illicit market has emerged where people with smartphones and bank accounts pay for their parking at a substantial extra cost. It's expensive to be digitally poor.
Our interviewees felt left behind in a society that does not care about their ability to participate. With a mix of shame, anger and resignation, they described everyday humiliations. One woman saved up to buy her grandchild a gift she wanted, only to be told at the till - grandchild in hand - that they didn't accept her money. "I felt like a thief," she told us.
Sweden's cashless transition
Swedes are known to be early and uncritical adopters of technology - this has become part of the country's self-image. In 2017, business researchers predicted that cash would be irrelevant in Sweden by March 2023 . It didn't quite happen, but near enough.
Over the last 150 years, technological innovations and entrepreneurship have propelled the country from severe poverty to being one of the richest in Europe .
The Swedish case is even more special due to the pervasive role of banks in the payment and identification infrastructure. Banks created the widely used payment app Swish, and also issue the electronic ID needed to access public services like the tax authority and benefits for illness, disability and unemployment.
Consequently, if you are not a bank customer, you can't access these public services.
During the pandemic , fears of contamination made handling physical money seem like a health hazard. "I hate cash. It's dirty," as one Swedish tech entrepreneur put it.
All of these factors combined have led to a modern Swedish society where digital money is good and cash is associated with crime and dirt. For people who still depend on cash payments, this stigma adds to their sense of being left out.
In Sweden, as in many other countries, a fully cashless economy feels inevitable in the coming years. But as we have found, people who rely on cash due to poverty are left without the means to manage independently or even to pay their bills.
This is not just a practical issue, but an emotional one. There is a sense of loneliness, of loss of community and human connection in the digital economy. As one of our interviewees said: "It's not just cashlessness. I feel that human beings have disappeared. We live like robots; click here, click that. Digitisation has made people lonely."
Moa Petersén has received funding for this research from the Swedish Research Council for Sustainable Development (FORMAS).
Lena Halldenius has received funding for this research from the Swedish Research Council for Sustainable Development (FORMAS).
