Sweden is serious about becoming a cashless society. How serious? Even the Abba Museum no longer accepts cash. Now that is serious.
Some researchers are predicting that cash there will be a “very marginal payment form” by 2020. Things are definitely trending in that direction. According to this BBC report, less than 20 percent of retailers now use cash. That’s half what it was just five years ago. Everywhere from public transit to tourist attractions — yes, even the Abba Museum — have also gone cashless. Since the government and banking officials announced their plans to reduce bank notes and coins in 2010, the circulation of Swedish krona has fallen by 40 percent.
Many believe that Sweden has succeeded in going cashless so quick because of its connected infrastructure, smaller population (10 million) and a higher level of trust by the people in the country’s banking system. A concern is whether this significant reduction in cash transactions will be a problem for the country’s small business owners. For some, it will be. But most seem to be adapting just fine.
They’ve been helped by a rapidly growing cottage industry of mobile applications and devices like Swish and iZettle. These technologies have given freelancers, craft-makers, traders, merchants and even panhandlers various options for accepting payments. Swish, for example, is used by more than half of the country’s population. Two-thirds of retailers in a soon-to-be-published survey say they plan to phase out cash payments completely by 2030.
“We offer payment by cash as well, but the sales are better when people can pay by card,” one fruit and vegetable stall owner told The Local Europe AB. “Nobody carries around cash anymore.”
Going cashless presents both opportunities and challenges for small businesses. It’s quicker to accept and offers more options for customers. Plus, smart business owners can collect other data (i.e. email addresses) to use for their marketing. Avoiding cash transaction also creates a safer environment for a company’s employees and also has helped reduce the level of illegal activity.
The downside? Some business owners don’t want others — in particular others in the government — to know what they’re earning and it’s pretty tough to hide that information after a digital transaction has been completed. Some older customers are slower to adapt. Oh, and then there’s the fees.
“We pay high card transaction costs,” another business owner told The Local Europe AB.
Regardless, it looks like Sweden is well on its way to a cashless society and small business owners there will need to adapt. Their success will likely lead to similar changes here in the United States.