Sweden leads the race to become cashless society | Hacker News Reader

Sweden leads the race to become cashless society

theguardian.com

32 pointseplanit67 comments

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.

This is a good point that cashless means having a smart phone and a bank account which marginalizes the already marginalized such as the homeless. I realize that Sweden doesn't have that problem but there are many other places that do.

Also anyone that's lived through a hurricane or a blackout tell you cash is king. Having a few days worth stashed is a good addition to any preparedness kit.

In Sweden there are the Roma/gypsy population who have smartphones but certainly don't have Swedish bank accounts. This is also true for many expats. Including other Scandinavian nationals.

Americans have an especially tough time finding a bank to open an account due to FBAR and FACTA, treaties signed to combat money laundering and such.

The result is that many bank branches choose to not offer accounts due to the added paperwork.

No bank account. No bankid. Often fewer services available to you.

Note: this is a common criticism for foreign nationals starting up a life in Sweden.

A.f.a.i.k. even if everything fails, you can still use the embossing on your card and your non-electronic signature.

I have used in car-rental recently. Not sure if my grocery store would accept this sort of payment though :-/

I'm almost certain that none of the businesses in Sweden have the machine to make impression / carbons like in the 80s

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).

Right -- preventing a run on the bank when people lose confidence in the system.

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

I don't think that is correct.

http://www.telegraph.co.uk/finance/economics/11895084/How-Sw...

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.

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.

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.

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.

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.

No cash removes individual volition? Will everyone get a list each month of what to buy?

Try donating to wikileaks with a credit card. Try buying porn with paypal. Your strawman of sudden total control is silly. This frog will be boiled slowly.

Of course, there is one way to be anonymous in a cashless society: purchase prepaid debit cards. One would think prepaid debit cards can be linked to the purchase, but no (at least where's I work). We had a problem a few months ago where a guy bought over $5000 with a fradulant credit card. However, because the prepaids can't be linked to the purchase, the cards can't be disabled; they are treated the same as cash.

Now, if you want to be paranoid, what you could do is purchase bitcoin, toss them through a tumbler, then purchase a prepaid debit card to use.

A lot of extra work compared to just using cash, but if societies want to go cashless, there are ways to be anonymous. Whether it should be that hard is up for debate.

>A lot of extra work compared to just using cash, but if societies want to go cashless, there are ways to be anonymous. Whether it should be that hard is up for debate.

Making it inconvenient can be an issue enough.

The Chinese firewall isn't about making it impossible to go to western sites. It's about making it inconvenient, so that most people use Chinese alternatives.

One other inconvenience I see is with the older generation who give money to their grandchildren.

> "Happy Birthday, Alice! Here's $100"

vs.

> "Happy Birthday, Alice! Here's a check for $100. Now, you can't use that right away. You need to take it to the bank and they'll turn it into a card you can use when shopping."

Also, when I was growing up, actually /seeing/ the money helped me appreciate it's value. I knew to be careful with spending because I could see how much I had (physically). My younger brother: "Can I get Overwatch? It's only $60!"

Will you purchase those cards with cash in the cashless society?

No. Normally, you'd just use your card to buy prepaids, but I mentioned if you were paranoid enough, bitcoin and bitcoin tumblers are an option.

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

That's something to be worried about. But I'm more worried about banks having the power to issue unlimited currency which is a default in a cashless society

Well, cash hasn't exactly stopped them either. I don't know what the figures are elsewhere, but in the UK around 97% of money is created by private banks making loans, not by the central bank printing notes.

Oh please learn some economics. Bank loans are not new money. Some TBTF banks have a problem of under-capitalization and may be bailed out with new money, but banks are government's strawmen on this racket.

Bank loans are new money according to The Bank of England http://www.bankofengland.co.uk/publications/Documents/quarte... The reason banks get into trouble is because they cannot meet even their tiniest obligations in actual currency. In a cashless society this will not be a problem, just unlimited digital money creation.

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.

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.

I agree that there are risks with a cashless society (especially from a privacy perspective), but it's not incredibly hard to understand the positive effects of cash-free (as you seem to suggest).

- Vendors not needing to carry cash, significantly decreasing (or even eliminating) security-related risks (e.g. grocery stores/bus drivers getting robbed)

- Removing PoS that affect quality of service for the actual service provided (e.g. someone paying the bus fare and holding up the ride)

- Reducing the possibility for criminals to launder dirty money (the flipside of the privacy aspect).

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.

Agreed,

I moved from Stockholm to London a few years ago and in this regard in particular it felt like stepping back in time.

I now end up putting all the smaller coins in the bin just to get rid of them.

I stood in line at a grocery store recently where the POS terminal failed and they started letting through people who could pay in cash. When they announced that, a hipster-looking guy in front of me commented "who uses cash in 2016?" or similar, to which my silent answer was to pass him and pay for my groceries w/ cash.

Doesn't happen very often though.

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.

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?

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...

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

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.

Margins matter. Somebody who makes $100k maybe spends $60k/year and doesn't care that they pay $600 for transaction fees.

Somebody who makes $30k spends $28k/year and $280 in transaction fees has a huge effect on net savings.

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.

Maybe so. But then one have to ask whose money we are saving by getting rid of the cash.

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.

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.

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.

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.

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.

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.

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.

Not affiliated, by I liked this https://plastc.com/

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.

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...

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.

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.

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

I can't speak to Sweden, but I don't think that London is really representative of the rest of the UK. It might be a case where the average lags behind the leader?

There's a big difference between "accepts contactless" and "cashless", though. I live in London and still use cash exclusively for in-person transactions, and I've never had a problem.

I think London is just unusually accommodating when it comes to taking people's money. Quite a few of the big shops in Oxford Street accept paper Euros, which doesn't really fit the "going cashless" narrative.

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.

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

An important goal along the way to chipping the subjects.

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! :)

This sounds horrifying.

How long before health insurance companies are able to track your diet or habits and adjust your premiums accordingly. I'm picturing a text message from the insurance company that tells me I've gone over my donut allowance for the month.

"health insurance company" - What sort of backwards society is this?

So not only can you not get on a bus without your movements being logged in a commercial database, but now you can't even buy a coffee without that happening too. And you call that "progress" ?

TBH buses in most places haven't accepted cash on board in quite some time. You have to buy tokens or a bus pass and use those. Even tokens I think are not much used any more because in bulk they are heavy and expensive to transport and account for.

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?

> 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

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.

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