
Sweden leads the race to become cashless society - eplanit
https://www.theguardian.com/business/2016/jun/04/sweden-cashless-society-cards-phone-apps-leading-europe
======
sheraz
House of cards. Cashless societies mean:

the unbanked are further isolated and prevented from engaging in commerce.

Older generations are left behind. Just trying to switch bankid login from old
phone to new phone is a PITA, and I'm tech savvy.

Lack of anonymous transactions means that my banks know about my vices such as
gambling, porn, or strippers.

Cascading failures - payment network crashes means no one can authorize
traction means long lines at registers. Everywhere.

Just lending money to someone requires a smartphones and apps (swish in
Sweden) and bankid (see above)

Battery dead on phone? Sorry, I can't loan you 500kr. (You can still receive
on dead battery).

Now, I will be the first to admit that when all the boxes are checked it works
pretty well. Swish is amazing.

However, what concerns me is the blind faith people have in this huge tech
stack. There is so much that goes into facilitating the purchase of a candy
bar from a vending machine. It is an all or nothing scenario. Either it works
100% or you can't use the chip in your card in the terminal to connect to the
network to the bank to verify funds available to authorize purchase of said
candy bar.

Thankfully there is still cash which in my opinion really greases the wheels
of everyday commerce.

~~~
powertower
One of the primary reasons for the push for cash-less societies is for the
government being able to put a negative-interest rate on personal savings (for
economic and social reasons - none of which are good).

This can't happen if you can take cash out (and to a lesser degree if you can
buy gold/silver).

~~~
andres_kytt
Government does not meddle with interest rates. Not here, at least

~~~
sheraz
I don't think that is correct.

[http://www.telegraph.co.uk/finance/economics/11895084/How-
Sw...](http://www.telegraph.co.uk/finance/economics/11895084/How-Swedens-
negative-interest-rates-experiment-has-turned-economics-on-its-head.html)

------
superkuh
In a cashless society all transactions are controlled and monitored by third
parties. There is no potential for individual volition except at the whim of
those controlling the systems. Cryptocurrencies will mitigate this slightly
but the loss of cash is going to be a huge blow to the individual.

~~~
andres_kytt
I find this approach really curious. All the transactions can be monitored by
third parties anyway as all the pos systems are networked and subject to even
lesser legal scrutiny than banks. Random adverisers can and do build
comprehensive profiles. A company is us claims to have full profiles of all
Americans. And yet, if there's a chance a citizen might benefit either via
less hassle as in the cash case or via better gov services, everybody goes
"but think of the privacy". As a result, societies get downsides of both:
there is no privacy whatsoever but no value generated for the citizen.

~~~
mrec
I think GP's point _re_ cash was just that cash transactions are typically
anonymous. Obviously you _can_ get around that by e.g. matching up till
receipts against video surveillance and facial recognition tech, but I'm not
aware that that happens routinely, so in practice you probably have a fair
degree of privacy.

~~~
andres_kytt
Cash transactions are anonymous only if most transactions are cash. I take x
eur from the bank and give them to you. You put x eur to the bank. That's
linkable. And the people sign up to all sorts of savings cards en masse making
their transactions at the till completely traceable. It is not about what
happens routinely, it is about what can happen. Banks don't give a damn about
your transaction history as long as you account balance adds up and neither
does the government. With cash, there is an illusion of anonymity. Without
cash you actually know what happens.

~~~
mrec
You're right, it's partially linkable, but only partially. If I take out cash
from the bank and buy something in a shop, it'll get mixed in with all the
cash from everybody else buying things there (which obscures the exact
purchase) and for smaller denominations there's a nonzero chance that they
might get given out again in change before being banked (which makes it hard
to prove _any_ purchase). Until tills start scanning and reporting banknote
numbers there's still far more anonymity than you get with digital.

Savings cards I wouldn't touch with a bargepole; I don't imagine anyone who
gives two hoots about privacy would.

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marssaxman
Why on earth is this considered a _good_ thing? Haven't we learned anything
about mass surveillance in the last five years?

~~~
fpoling
I do not worry about mass surveillance that much. With all the cameras
anonymity of cache quickly disappears in any case.

What really bad is when a police or any arbitrary guy representing a state can
order to freeze all the cards and bank accounts for an individual. This is
already happening in Russia and is used not only against political activists
but sometime against arbitrary persons through police bribes by their enemies.
If a person does not have savings in cash, he or she may loose access to all
his money in a moment and it takes often weeks to fight those illegal freezing
orders. One can literally starve while doing that.

~~~
andres_kytt
And when you have cash, a single robbery can destroy your life savings. Or
police can come and seize your money. There was someone in the thread amazed
about the trust people put in the complex stack. I'm amazed the trust people
put in the ordinary paper-based process. A computer cannot be bribed and
leaves a cryptograhic audit trail and does not burn but for some reason a
stack of papers under my matress is more trustworthy. There is a lot of
irrationality around the topic. I don't know who's right but very clearly it
is to an extent about fear of unknown.

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stenl
I live in Stockholm and haven't used cash for several years. I have no cash on
me ever, no coins, nothing. It's liberating. I get very annoyed when
travelling and I rediscover the cash-based society and the need to always
predict how much cash to carry.

~~~
driverdan
I find the opposite is true, that cash is liberating.

1\. I always know how much cash in in my pocket. I typically carry $30-50
which is plenty for everyday transactions.

2\. It's easy to budget with cash. You can never spend more than what you
have.

3\. I don't have to worry about paying off card balances.

4\. The chances of getting a credit / debit card stolen are a lot higher than
having my cash stolen, eliminating the hassle of replacing cards.

5\. I support my community by eliminating the overhead of accepting cards.

6\. I can easily pay individuals instantly without having to worry about what
service to use or delays in transferring from my bank to theirs.

7\. I maintain my privacy.

I'm not even considering the downsides of using a phone for payments (lost /
stolen / broken / dead battery / borked update / bad UIs).

All that said I use a mix of cash and cards. Cards do have a lot of consumer
advantages (cash back, disputing transactions, etc). Don't pretend that
they're far superior to cash though. Both have their advantages and
disadvantages. The loss of privacy is a HUGE problem with electronic payments.

~~~
stenl
I agree on the loss of privacy, a big drawback of (current) cards.

As for your other points: Swedes use nearly exclusively debit cards directly
linked to an account (so no bills to pay, no interest, no risk of spending
more than you have). We all have apps to monitor our account balance.

For P2P payments we use Swish, an app linked to your bank account and your
phone number. It lets you pay instantly to anyone with a phone number and it's
"free" but of course locks you in to your bank. The UI is decent.

As for "supporting your community by eliminating overhead" I think the
overhead is higher for cash, and many businesses seem to prefer cards (many
now, like banks, are cash-free). Also, eliminating cash has the advantage of
making it harder for businesses to avoid paying taxes.

I also agree that paying with your phone sounds worse than using a card (which
takes seconds and never runs out of batteries), but maybe you get your privacy
back?

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towb
As I see it, this has the potential of being a disaster for certain groups of
people in the society. Old and poor. And there are no free solutions, you have
to spend to spend. The old paypal tax but on every purchase you do. There are
problems with this that has to be solved before it's implemented but aren't
yet there for the early adopters, which may then leave too many people behind.
These are some of my concerns, but what do I know...

~~~
StavrosK
Yep, in a cashless society, everything is 3% more expensive.

~~~
kristofferR
That's not really true. The average fee in Sweden is closer to 1% than 3%, and
handling cash is really expensive. Realistically a cashless society should
save money.

~~~
colejohnson66
Well yes, it saves people time (and time is money), but it's a trade off and
sometimes ends up costing more than it saves.

If your kid wants to buy something, normally you just give them cash and they
can't spend anything more. If you give them your card, now they can spend as
much as they want ($1000 on Clash of Clans for example). While there are
solutions such as giving your kid their own card you transfer the money to,
it's a lot more effort than just pulling out a $5, and I'm sure many parents
would forgo that route and just hand the kid their card.

What do you do when you want to buy something anonymously? Normally, you'd
just pay with cash. Want to donate to Wikileaks without anyone knowing? Use a
money order. In a cashless society, you can't do it as simple as that. You
need to purchase prepaid debit cards (which costs time). And if the prepaids
can be linked with the purchaser, then you'd need to spend even more time
buying bitcoins, tossing them in a tumbler, then buying prepaid debit cards. A
lot of extra work compared to just using cash or money order.

So yes, a cashless saves time, but it also costs time in other areas. Has
Sweden found a balance? Doubt it.

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skocznymroczny
Which is pretty much proportional to the adoption of negative interest rates,
which wouldn't really be possible on such scale without eliminating physical
cash.

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polotics
This is obviously all wonderfully modern and the wave of the future and all
that. Yeah Sweden!!! Totally lagom :-)

What the article fails to mention is that the swedish central bank has been
able to implement an extremely aggressive negative interest rates policy
thanks to The Cashless.

So if you like your savings eaten away by government mandated fiat (see what I
just did there?) then of course be all plasticky and virtual.

This ends in hyperinflation as well as taxation cat-and-mouse games between
governments and alternative currencies.

------
swiley
I would understand the excitement for this if there where some fairly
decentralized payment protocol so any single third party would not have the
final say in wether or not you could buy/sell something and/or those rights
where protected by law, but neither of those are true.

------
fpoling
In Norway I know only a single shop that still does not accept cards, perhaps
on principle. Even farmers selling fruits and vegetables often have a card
reader.

However many shops accept only cards from Norway that are connected to the
BankAccept system which are significantly cheaper for a shop to accept than
credit cards.

Also as a sign of times street musicians sometimes write their phone number
for Vipps, a local payment system that allows to send money just by knowing a
phone number.

Still the country is far from cachless judging by the number of professional
beggars in big cities. Somehow they make a living so people still curry coins.

~~~
RivieraKid
Wow, that's interesting, I'm a big fan of card payments because tap to pay is
super convenient (most places in Prague have card readers) but what annoys me
is the Visa / MasterCard duopoly. Because this means that a fraction of every
payment goes to an American company - it's not a competetive market so they
have a sizeable profit margin. It's cool that you have a local alternative, I
wish we had that too or at least more than 2 competitors to push profits down,
so that card payments don't leak money out of the economy.

~~~
fpoling
There is still a problem as shops do not pass savings from using a local
payment system to the customer. As some banks started to offer cash-back cards
that return up to 1% of payments back, as a customer I have more insensitive
to use cache-back credit card than a local one.

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brainpool
I live in Sweden and have not visited an ATM for months. Even public toilets
have a card reader attached.

I would like to have a way to easily display the balance of the card though,
or just the last few expenses, preferably on the card it self.

~~~
CuriousSkeptic
Not affiliated, by I liked this [https://plastc.com/](https://plastc.com/)

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kristofferR
How am I, for example, supposed to pay my Swedish festival buddies for small
stuff like a meal or a few beers if cash is banned? Swish, the popular person-
to-person payment app in Sweden, only work for Swedes.

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CuriousSkeptic
The local public service news did a piece on this a while ago and the biggest
problem they could envisage was the usability problems. Which is kind of sad,
I'm sure most usability issues can be solved one way or the other.

Heres one thing that really should have more focus, remember when visa and
mastercard decided to kill allofmp3?
[http://www.theregister.co.uk/2006/10/19/allofmp3_attacks_vis...](http://www.theregister.co.uk/2006/10/19/allofmp3_attacks_visa_and_mastercard/)

------
dijit
Ehhhhhh I think Britain is closer. Contactless payment methods are
significantly more common in London. (In fact you'd be hard pressed to say a
business which doesn't accept contactless /and/ Apple Pay)

I live in Sweden and there are places that won't take VISA- and banks only
give out mastercards which cost the consumer monthly. Not to mention the fact
that contactless and Apple Pay are nowhere to be found.

Maybe it's different in Stockholm but in Malmö you can definitely see a
negative disparity when compared to Britain.

~~~
K0nserv
I moved from Stockholm to Edinburgh about a year ago and I definitely use cash
a lot more here. Sure contactless is more widespread, but a lot of places
don't accept cards or have a minimum spend amount for card transactions.

When I lived in Stockholm I believe I went 6 months without handling any cash,
here I can barely last a day without it.

~~~
sandstrom
Same, I cannot remember when I used cash the last time, but I think it's more
than 9 months ago.

------
gremlinsinc
What happens when power grids fail, or if war ever breaks out in Europe and
internet banking fails as a result? --- At least with cash you can still get
the staples at the store.

~~~
CuriousSkeptic
I guess what would happen is that people will invent new cash as needed.
Cigarettes being the classic example.

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jakeogh
An important goal along the way to chipping the subjects.

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bjornsing
The busses have refused cash for years now, mostly for security reasons. But
the other day one of my favorite cafés also declined the kingly payment
method. A good sign indeed. :) A perhaps even better one is that one of the
lunch places I go to no-longer requires my pin code when I pay by card. :D

Progress! :)

~~~
miend
It sounds downright Orwellian. The government, its banks, payment processors
all having the ability to instantly lock you out of the economy and watch your
every transaction, leaving you totally out of options should you get on their
bad side?

That just sounds like another building block in the surveillance Panopticon,
psychological assurance that you'll never become dissentious because your
continued existence in the economy essentially depends upon the state's grace.
It changes the way people act, and even the way they think. It's the
disturbing new reality that Snowden, Greenwald, et al. have sought to do
something about, and here Swedes seem to be embracing it openly.

It sure sounds like this service could offer some great conveniences to daily
living, but is it worth such a heavy price? The erosion of the will to
dissent, and the power of the individual over their own lives? Are these an
acceptable trade for the comfort of never having to see a coin again?

~~~
bjornsing
> The erosion of the will to dissent, and the power of the individual over
> their own lives

We Swedes are way past that. We live as humble subjects of our government,
cuddled from cradle to grave, bowing to their authority much as we once bowed
to the king. :P

But every four years the people is abolished and the government choses a new
one, so it's still a democracy! ;P

~~~
bjornsing
I'm only half joking here, and I'm definitely not saying you're wrong. Just
trying to explain why we Swedes probably don't think about the cashless
society in the same way as americans do.

And by the way, most of my friends would probably describe me as "a borderline
libertarian" (by Swedish standards), "fixated" on individual liberties and
similar.

