In Sweden, cash is king no more | Hacker News Reader

In Sweden, cash is king no more

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72 pointsmebe82 comments

I would have to trust my government a whole lot more than I do to be comfortable with this - and then trust that my government isn't going to change over the course of my lifetime.

Surely Swedes buy drugs and cheat on their taxes, just like the rest of us. Even if you don't - why wouldn't you want to ensure you can quietly conduct an illegal transaction, should a currently unforseen need arise in the future? Getting rid of cash seems awfully shortsighted.

This problem is already (partly) solved by exchange in digital gold currency. Pecunix and e-gold are two such services.

No, they're not.

I don't know any drug dealers who take that.

I know a few that take bitcoin :)

To me this is like the argument that touch screen only phones are less good to keyboard/keypad phones because you lose the tactile feel and cannot text as you drive.

I am not going to claim I am completely innocent, but a cashless society has many benefits. The fact that it may impede the ability of others to cheat on their taxes or purchase contraband is a poor excuse to remain on cash. Why does the majority of the population have to suffer?

Do the Visas and Mastercards of Sweden still get their cut of every transaction? What a great way for these companies to solidify their corner of the market.

Here is what I want: a way to do electronic transactions anonymously and cheaper that the current options. How do you do this while combating fraud?

That's kind of the whole point of Bitcoin. Free to use, not tied to any government or organization, and it can be completely anonymous.

With that comes the downsides that you have to be technical and know what you're doing to use it, as does the person you're buying from, and bitcoins are basically as easy to steal as cash.

What is the 'anonymity' property of bitcoin I keep hearing about? Has there been a fundamental overhaul of the protocol since Satoshi's initial paper?

The parent means pseudonymous. Bitcoin is certainly not anonymous.

And with the transaction history included, and most transactions, by necessity, tell something about you (at least the merchant probably needs to know where to send your item or whatever) it seems to me that it would be utterly trivial to get a hold of the real identity of the vast majority of the users after even his/hers first transactions. And this is valuable information and it will, as today, be bought and sold freely - maintaining a database of who is who seems like childs play. Not only that, but also who bought what (or at least from who), making it the least anonymous way to make a purchase imaginable (almost as bad as saying what you bought on twitter).

For anyone hoping of using bitcoins for their everyday transactions, would that be any more anonymous than a credit card is today? Or even worse, it might give you the sense that you are anonymous when you are not.

You can generate a new address for every transaction and thus remain untrackable.

Isn't bitcoin transfer from old to new address trackable?

How are you going to fund each new address? You have to remember that money moves from A along a vertex to B. Its the vertexes that kill you...

How will you get money on your new address? Transfer them? No luck there... (Or have I missed something?) And even with a new address you will probably reveal yourself with most transactions anyway.

Sure you can probably find a way but it will be a hassle and probably quite a hassle if you don't want to trust anyone. Because of the transaction history the only real purpose I've seen with bitcoins is the fact that you could mine them quite successfully and thus get an anonymous income, and with those mined bitcoins you could buy something that isn't tied to you, such as a VPN. That was a quite cool scenario with bitcoins in my eyes.

Sure there are some VPNs that allow you to snail-mail money to them but that is quite a hassle. But aside from that you pretty much have to use your card, and by that you reveal your identity. And given that the VPN service isn't subject to the same laws as your ISP using one could actually be even less anonymous than not using one at all.

Anyway, due to the transaction history that is the only scenario I've found bitcoins beneficial (and the reason for why I haven't even bothered to read up more on bitcoin). Would love to be wrong though.

True, pseudonymous is the right word. You can start mining bitcoins without disclosing any personally identifiable information (if you obscure your IP address or connect from a public wifi network or something), you could buy bitcoins from someone on craigslist, pay in cash and have them sent to this account, etc. But the minute you make a transaction that links this account to you, all the activity on the account is linked to you. At least that's how I understand it, see [1]

[1] https://en.bitcoin.it/wiki/Anonymity#Staying_Anonymous

Actually it's much worse than this, because while your identifying information is most likely not interesting, aggregate network flows are. For example, when a node tends to aggregate transactions, we can infer that they are a 'merchant'. If their public key doesn't correspond to a known business, we can infer that they are engaged in unregulated commerce and investigate. Nevermind the very real possibility of having an out-exchange refuse a transaction because several transactions back, the value was stolen or otherwise involved in nefarious deals ("chargeback 2.0").

If a payment technology can't be used to incentivize TOR nodes, it is not anonymous. Throwing around the word 'anonymity' when one means 'psuedonymity' does a disservice to everyone interested in actual anonymous systems.

If a payment technology can't be used to incentivize TOR nodes, it is not anonymous.

You can incentivize me to run more nodes with AMEX, Visa, MC, Travelers Checks, cash, red lobster gift certifcates or gold dubloons. From your comment that I quoted below its obvious you care about this field but I'm not sure where you were going with the above statement?

Throwing around the word 'anonymity' when one means 'psuedonymity' does a disservice to everyone interested in actual anonymous systems.

I could not agree with you more. Picture a crowd leaping to their feet shouting bravo and huzzah!!!:)

I mean an addition to TOR where a user is explicitly paying each hop for transit. To do this (without buying nHops*nNyms count of unconnected red lobster gift cards), it must be possible to split a single source of value into two unassociable parts.

The patent has come and gone on blinded signatures. Their fundamental drawback is that they don't work without the support of the banking industry, and why would the banking industry (a cartel) want to reduce their profits?

Yes, Visa, MC and Amex take a cut. This infuriated shopowners to no end when they raised their tariffs, prompting a wave of "no charges under 50kr" or "3kr extra if you're paying with card (under x kr)"

No, the banks take a cut. The interchange fee that goes to the networks (VISA & MC) is very low (don't know the exact amount).

AMEX is another beast. AMEX is not sold through banks and AMEX can therefore set their own very high rates. This has caused many retailers to stop accepting AMEX altogether. IKEA being a good example of such a retailer.

Cash is remarkably resistant to all the potential problems that could disable credit card transactions. For example, in 2003, much of the northeastern U.S. was affected by a power blackout that lasted over a day in some places, and of course credit card readers require power to operate. The servers that support credit card transactions have backup power (although only for a limited amount of time), but they're also vulnerable to network outages, software failures and deliberate attacks (we've seen how bad some of our major banks are at security). Having cash as a backup seems to be a prudent choice.

When I lived in Santa Cruz, we had a day-long internet outage due to a fiber-optic cable being cut, which led to most shops not taking CCs, despite there being no trouble with the power. A few mom-and-pop shops did good business by essentially agreeing to take IOUs; they wrote down CC #s on paper and manually ran them later, although afaik that's contrary to most CC companies' policy: http://www.mercurynews.com/centralcoast/ci_12115324

Actually it is still accepted by CC companies to use the old hand operated machines that have a roller, that takes an impression of the card.

Not sure if those are still accepted in Europe; fairly sure they no longer work.

Not necessarily a good thing. No cash means no privacy.

Agree. I never understand these dichotomies people set up. Why can't we just have both? The US system is a good balance, at least at the moment- you have an option to do either, with cards widely accepted except for a few ma and pa bars and restaurants.

As a Swede I am used to always being able to pay with my card; Heading to the bar? No need to withdraw cash. Grabbing a taxi home late at night? No need to worry if you have enough cash, they accept cards.

To add to this is that electronic transfer of money to both businesses and private citizens is quick and easy. If you transfer within the same bank it is instant and takes up to a day, depending on the hour, to transfer between banks.

As a Swede, I always bring cash. Heading to the bar? Already have cash in the wallet. Grabbing a taxi home late at night? No need to worry that I don't have enough cash on me.

Store temporarily only accept cash due to some error? Replace panic with nonexistent queue.

Regardless of whether you always pay cash or always pay with a card and regardless of whether you value privacy or not - you should always, in my opnion, have some cash with you. That has served me well and I've never in my life regretted having too much cash on me. The day I get robbed the cash I have on me is the least of my worries, if anything having an empty wallet might be provoking to someone that just tried to rob you (or a lot of money might get him (or her) greedy and ask for more, you never know).

Note to self: Get rid of (and remember) the CCV code on the card and destroy the magnet stripe on my card. Anything not working with the chip isn't worth the hassle nor worth the trust of using a card (that might sound strange for some but in Sweden the use of the magnet stripe is quite rare).

As a swede I never have cash on me anymore. But when I lived in Tokyo, the situation was reversed: low crime levels, high prices and nowhere to use a card, all contributed to me walking around with on average about $500 on any given day. That was a decade ago, though.

While you have a point about carrying cash I just have an irrational dislike towards change. The damn coins are heavy, close to worthless much of the time and overall annoying.

And I have barely ever encountered a situation where the card machine is broken,at least not in recent years but it can of course happen.

'Removing' the CCV and magnetic stripe is actually a good idea - Wouldn't trust most (Swedish) places that don't use the chip to read the card data.

My Uncle who was in the Merchant Marine always used to keep a decoy wallet with expired cards and a tiny amount of cash so that if he got mugged/pick pocketed he would not lose much,

All grocery stores around me use a sealed cash system. I've been more often stuck behind people wanting to pay with cash when the cash scanner breaks down compared to the card machine being down.

Out of your three examples, only the last one is an argument for cash over cards. Is that the reason why you prefer cash? Or is it the privacy thing?

Cash is faster, I have better control over my money (but that's just because of how I'm handling them, YMMV), and the privacy part doesn't hurt - That's more of a principle than anything else, I really feel that we must have a anonymous way for payments AND that the anonymous method must not in any way be suspected of foul play just for using it. That is the first "danger" that will come, that people get so accustomed to cards that the day someone wants to pay a packet of gum with cash you get suspicious - that is something that I will truly dislike. And given the current development I see no reason as to why that won't be the case in the semi-near future.

Also, cash is much safer. That everything that is needed to take money for me is written on a card that I have to pick out for every purchase is beyond lunacy. And people actually have stomach to say that post-it notes with your password is bad (it is, but in perspective)...

So part of why I mostly use cash is of principle, cards are just so insecure. It's not that I'm afraid I'll get in trouble but part is principle and the other part is that I have no idea if my "secret" number is revealed to the wrong person. 8 months later I'll potentially be denied a purchase because the card is empty...

I do however use my card from time to time, but mostly cash. And so far the benefits of using cash are actually greater than that of a card in my eyes - so even without the benefit of security and privacy I'd still use cash.

As a Swede, I can't recall the last time I used cash in a normal commercial context - that is, not dealing directly with another private citizen - since I turned 18 and got my debit card 13 years ago. I can't recall the last time I used the magnetic strip either. It's all chip for me, and it's free of charge barring the 25 SEK (~2.5 EUR) per month the bank asks me for my complete account setup.

MM so your the annoying person who isn't organized enough to bring cash and causes long queues at the bar or coffee shop when I am buying my morning coffee and paper at the train station.

The more you use your card the more chance of getting skimmed using cash for small purchases is a way of reducing your attack surface.

You are welcome! :)

No really, the card readers are damn quick these days so it hardly takes much longer than paying with cash but I admit that it takes slightly longer. I would argue that most people pay their morning coffee with card in Sweden.

I have used my card all over the world, for small and large purchases, and have yet to get it skimmed - lucky I guess.

But another aspect of increased card use is that tax fraud becomes harder for the businesses as I believe the logging of card transactions are quite a lot harder to hide from the tax authority so I do see that as a positive thing.

At my medium sized local station around 2k people catch trains within 45 mins every morning so cash is much much faster and allows a greater through put of transactions.

We all use smart cards and no one pays at point of transport...

The more you use your card the more chance of getting skimmed using cash for small purchases is a way of reducing your attack surface.

I don't get why people care about this. Credit card fraud is the bank's problem, not mine.

not these days chip and pin pushes it more towards the end consumer and who do you think pays the bill for fraud the banks customers do

To me it's common decency to not be negligent and I deeply dislike the opinion that "the bank will cover it".

For starters it's irresponsible, secondly the cost goes back to the banks customers anyway. But also, one day the bank will say no. You didn't do what we expect of you, we will not give you anything.

This is not that uncommon and if it happens you might loose a lot (although to keep good faith and keep people using the cards the banks usually go to great lengths to cover up that fraud ever happens and they usually repay losses of their customers, but I seriously do not get why anyone would be willing to take that risk - even the hassle of having to get in touch with your bank and temporarily be out on a lot of money etc. is enough to avoid that risk).

Not to mention that I don't feel like "it's okay, the bank took care of it" is okay. The bad guys got away with it and that is never okay.

Leaving your credit card sitting out unattended on a park bench is negligent. Buying things with a credit card is not negligence.

There is also the risk that they steal small amounts from you and you don't realize it. This won't happen if you check your statements but I don't always and there are enough small charges for me not to notice if I was charged a small amount extra every month.

Skimming is only a problem for magnetic stripe readers, which at least here in Portugal are increasingly rare.

Chip based readers are safe, since the chip actually performs cryptographic operations itself - the private key is never copied out.

Swede here. There is a part of the article that warrants special attention:

> The number of bank robberies in Sweden plunged from 110 in 2008 to 16 in 2011 — the lowest level since it started keeping records 30 years ago. It says robberies of security transports are also down.

It was not long ago when armed robberies of security transports were a serious serious problem. Now when the article mentions it, I make a mental note that this has indeed decreased a lot. I think only a few years ago Sweden had lots more robberies of vehicles than the neighbouring countries. There were discussion about arming the guards, but it was argued that would escalate the violence. We have also seen many movie-like heists, the last (widely reported one) was a heist involving explosives, helicopters and sabotage of police helicopters. (http://en.wikipedia.org/wiki/V%C3%A4stberga_helicopter_robbe...)

I don't know but I assume that decreasing cash usage has been an active decision to combat the armed transport robberies.

> The flip side is the risk of cybercrimes. According to the Swedish National Council for Crime Prevention the number of computerized fraud cases, including skimming, surged to nearly 20,000 in 2011 from 3,304 in 2000.

Damn flip sides...

Swede here, and as paranoid as the next person. I moved from Gmail due to privacy concerns. I block a lot of tracking domains at DNS level.

However, those are trade-offs with very little negative impact in my daily routines. A slightly worse UI for my email is nothing like moving from cards back to cash. It would be like moving from the Internet back to snail mail because email is insecure, or perhaps to Stallman type email/wget web browsing. Simply not worth it.

Speaking of snail mail, I send a handful of those a year and barely know where to put the stamp. I handle my taxes, student loans, banking, social insurance (for my kid), etc, online.

I would love better regulations for usage of consumer data, but cash? No way.

I get the convenience for things like paying rent, taxes, etc., but the main reason I don't use credit cards for small things is how much less convenient it is. Much easier to hand over 50 Kr than go through the routine of: gesture to indicate I'm paying with card / make way over to machine at the end of the bar (waiting if someone else is using it) / insert card / enter pin / pause to confirm it went through. Even if I have to wait to receive change, it's usually still faster.

The main reason I use credit cards for everything including small things is that it's so much faster and more convenient.

Also, I don't carry coins anymore, and I rarely carry bills either (I'm in the US).

The downside being that you have very little consumer protection if you buy something that is broken.

I buy everything through my Mastercard credit card. I always pay my bill at the end of the month so I never pay anything extra for it.

It has saved me countless of times when I have ordered stuff online or bought stuff in stores that they have refused to take back. And on top of that I get bonus points that have given me free flights.

I doubt a credit card is going to do much for me if I receive substandard beer or coffee. :)

I do use credit-cards for purchases of physical items. European cards don't typically give cash-back or bonus points, though.

make way over to machine at the end of the bar

Really? Here in Portugal portable payment terminals are nearly ubiquitous. The rest is very true, though.

what email solution do you use? I've been thinking about a change too

I get email services from my VPS provider and use it with a desktop email client or, increasingly, on my phone. They have a crappy Squirrel webmail that I very rarely use.

In New Zealand, we use cards for _everything_. Taxis, corner shops, bars...

However, cash still pays a massive part in our economy. Mostly for people who want to remain anonymous with their transactions. Heaps of livelihoods depend on cash; farmers markets etc.

Came here to say this. I barely ever use cash here, even for small 1-2 dollar transactions. Cash is an inconvenience. Mobile eftpos is pretty sophisticated here and you'll find that a lot of stalls at places like farmers markets often have eftpos machines. We haven't got a square et al here yet, but once that arrives I can't really see people ever using cash for much of anything.

"One should be able to send money and donate money to different organizations without being traced every time," he says."

That's a tough problem, which the US government will demand of foreign governments and fight tooth and nail at home.

"If there were no cash, what would they do?" says Ulvaeus, 66.

Well, he's in for a surprise ...

I think this (article page) comment says a lot about the real motivation:

"...So instead of taking the very SMALL and SLIM chance I'll get robbed by a street thug - I should switch to digital currency and just allow the banks to DEFINITELY ROB me... yeah, right..."

I also found it interesting that the article made no mention at all about the tourism industry.

So, already five strong reasons why cash will not go out of fashion any time soon:

1. Privacy.

2. Tourism.

3. Cost (tends to be important for non-banks). Both on-going and capital costs.

4. Store of value (tends to be important for elderly and some wealthy people). This can also cover electrical failure, database corruption or theft, including government or non-government financial fraud or error.

5. Ease of use (tends to be very important for elderly).

In addition, there is simply no viable alternative that covers all or even most of the above.

A lot of voices in this thread seem concerned about the extra power this would grant the Swedish government. I'm confused: if anything, wouldn't this give the government less control? I'd be more afraid of Visa/MasterCard having a monopoly on simple transactions. Maybe eventually the credit card company's networks will be deemed a public good, and then government will take over the payment processing infrastructure, but until then I think the corporate overlord scenario is much scarier.

So in a few years, the govt. will get a report at the end of the year showing that model Swede citizen has bought more than the recommended amount of meat or alcohol or, heavens forbid, has bought tobacco products. And not enough fruit/veggies. So the friendly Swede govt. will "recommend" that model Swede citizen fork over an insane amount of money and "optionally" attend re-education classes in healthy living. Can you spell Big, Big, Big Brother?

It's not really like that in Sweden. A lot more would have to change in Sweden's national government; public policy, especially with regard to privacy issues, are amongst the best in the world. This doesn't mean a super-fascist regime is impossible in the future. But why would a shift away from paper money bring about the changes you propose?

Because with all transactions recorded it would become possible and when something becomes possible, oftentimes govts are tempted. As an exemple, where I live the govt cross-checks your income tax filing with the automobile registration records and if there is, in their opinion, a discrepancy, you have to explain yourself.

Also my comment does not single out Sweden, it is more of a general observation.

I expirienced the exact opposite in Maebashi Japan circa 2003. We had to go to Tokyo to find a place to get some cash out of our foreign issued credit cards, and even the local ones were not universally accepted. For such a high-tech nation as Japan I was completely shoked.

In combination with the transaction tax (currently discussed in the EU - [1]), this is a killer tool, to get more money from citizens.

Also: how is this supposed to deal with power outages? No food, when there is no electricity?

[1] http://en.wikipedia.org/wiki/Financial_transaction_tax

I haven't noticed this at all, except for the public transportation. If anything, there are plenty of businesses that won't accept cards under a certain limit (usually 100 crowns, or about $15).

The only businesses that don't accept card/chip in Sweden today are the "turk shops" - the shady little corner shops that sell old, dry pick'n'mix candy and stale bread.

Why can't a thief force you to transfer money electronically just like the money was transfered for the church donation? (I am not saying that the church donation was coerced.)

This was a legitimate question. I'm sorry that someone took it otherwise.

Whether going cashless will dramtically reduce the incentives for mugging people is an interesting question.

Presumably because the transaction would be logged and he would get immediately caught.

Have you ever seen how quickly money is moved/laundered after an ATM skimming operation?

I wonder what that would do to the illegal drug industry.

A lot of PayPal transactions whose notes field say "ebay: vintage photograph" or something else that can be legitimately expensive and small.

Bitcoin? If there's a need for something, people will find ways to circumvent laws and tools against it. In a completely cash-less world say 100 years from now, the Bitcoin we have now will seem like version 0.01 of the anonymous digital money we'd have then.

Barter, or elaborate e-laundering of transactions. Where there's a market there will be a way.

There was a story recently about the growing problem of theft of Tide laundry detergent, people paying drug dealers with stolen Tide detergent.

Did the drug dealer happen to be a laundry detergent distributor?

Maybe it would be better to get rid of muggers instead of cash?

And how do you propose to do that? Pre-crime?

The culture is based on government rule and control+high taxes, this is the next logical step and it doesn't surprise me.

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