By Ben Antenore, European Affairs Editorial Assistant
Two nations, Norway and Sweden, are making serious moves toward the abolition of paper-based money.
On January 22, Norway’s largest bank DNB called for an end to the usage of cash. In an interview with newspaper Verdens Gang, DNB executive Trond Bentestuen spoke of the dangers and uncontrollable nature of paper currency: “Today, there is approximately 50 billion kroner in circulation and [central bank] Norges Bank can only account for 40 percent of its use. That means that 60 percent of money usage is outside of any control. We believe that is due to under-the-table money and laundering.” For Bentestuen and DNB then, the only solution to fighting money laundering and other illicit practices is a total phasing out of cash. He supported this conclusion with data, citing that only about 6 percent of Norweigans use cash daily and, of that small number, usage is skewed highly toward the elderly.
DNB isn’t alone in this dream for a paper-less kroner. In 2013, the Norwegian Hospitality Association lobbied the Ministry of Finance to abolish the right of consumers to pay in cash at all shops and restaurants. It explained that such an act would prevent “disreputable” business-owners from avoiding tax. Last year, following in the footsteps of its colleague DNB, Nordea, the second largest bank in Norway, announced it would stop handling cash at their branches. When asked about that move, Åse Dahl, the bank manager at the Oslo Central Station Nordea branch, told the broadcaster NRK, “Society is getting steadily more digital, and customers want to do as much as possible online or on mobiles.”
Norway’s Scandinavian neighbor Sweden has also been moving towards a cash-less future, but at an even faster pace. Associate professor of industrial dynamics at the Royal Institute of Technology, Niklas Arvidsson believes that four out of five purchases in Sweden are made electronically. At more than half of the branches of Sweden’s largest banks, no cash is kept on hand and cash deposits are refused. These banks believe that they have saved an incredible amount of money on security by removing the incentive for robberies. Instead of money, Swedes favor using cellphone applications and plastic cards. In 2015 alone, there were nearly 2.4 billion credit and debit transactions. In a slightly humorous turn, ABBA’s Björn Ulvaeus, the man who wrote “Money, Money, Money,” has become a disciple of Sweden’s cash-free movement.
Other Scandanavia countries are following in the footsteps of trailblazing Norway and Sweden. Last year, the Danish government stated that, as of 2016, retailers and restaurants should no longer be bound by law to accept cash payments. In Denmark, roughly a third of all citizens use the official Danske Bank phone application MobilePay, which links users’ phones together and allows for payment though swiping. Finland also reports high use of electronic payment. The European Central Bank recording that there were 213 card payments per inhabitant during 2012 in Finland. According to a study promoted by CNN and done by the Norwegian central bank, “Scandinavians rely on cash for less than 6% of all payments made. By contrast, around 47% of U.S. payments are still made with cash.”
In both Norway and Sweden, this ambitious transformation has encountered some resistance. Norwegian Finance Ministry spokesman Tore Vamraak indicated less enthusiasm about cash-less currency when he spoke to VG about DNB’s announcement: “We have no plans to change the law in this area now […] There are many, including the elderly, who still want to use cash and that must be allowed. Moreover, it isn’t unproblematic for privacy to make every transaction traceable.” In Sweden, there is similar concern about how its 1.8 million pensioners will adapt. Johanna Hållén of the Swedish National Pensioners’ Organization expressed a desire for the Swedish government to consider its senior citizens and to take things more slowly in the cash-less transition, “A lot of elderly people feel excluded when you need to use cash cards or your mobile phone to take a bus or use public toilets. Only 50% of our members use cash-cards everywhere and 7% never use cash-cards.”
Former director of the Swedish police force and former Interpol president Björn Eriksson has become the face of a protest against the cash-free movement. Eriksson believes that the transition is being championed by banks because it generates fee income and is a way for them, and credit card companies, to make a greater profit: “Something is being privatized without people knowing what the implications of that privatization are.” Eriksson also asserts that the total digitalization of currency will put rural citizens at a disadvantage, with cellular service coverage much less reliable once one leaves a city. For mobile card readers, which require a cellular connection, this presents an issue.
The promise of a cash-free currency has not rid Sweden of crime, however. In 2014, the number of electronic fraud cases in Sweden rocketed to 140,000, more than double what the amount had been in 2004. In 2012, Europe experienced a 15% jump in credit card fraud, hitting €1.3 billion in total.
For all of the hype surrounding a cash-free future, Scandinavians still feel a sentimentality for physical currency. In October of last year, Sweden’s banks rolled out a new series of bank notes depicting famed Swedes like Greta Garbo.