The cashless societies – where every transaction is performed digitally- are being envisioned for decades. But hardly there’s been a country that has made it a reality. But a few of them are of course getting close to it. First, Kenya was in talks for the major uptake of mobile payments and now Sweden has become a forerunner.
Revolutionizing the banking system
Fast cash has almost disappeared in Sweden. The Swedish people have limited the use of cash to only a small portion of their day to day activities and that too is decreasing at a lightning speed. While 6 years back, 106 billion Swedish crowns were in circulation in the country’s wallet and cash registers; presently just 80 Billion Swedish crowns are in circulation. And even out of that, merely 40 to 60 percent is actually in circulation regularly.
Even if one walks through the second city of Sweden, Gothenburg, it is almost impossible to first a single shop that does not accept card payments. The locals have made it a habit to carry no coins or notes in their pockets. They use mobile money apps that enable fast, simple payments and money transfers on mobile devices. The mobile payments apps allow real-time transactions to take place, enabling users to transfer money directly from their bank account to the any other person having a bank account, wherever they are. This has revolutionized the local banking system.
The initiatives that Sweden took to eliminate Money Laundering
A couple of factors perform as major contributors towards the rapid shift of Sweden towards electronic-only money transactions. Not only have the various businesses done away with the minimum spent rule when talked about the card transactions but also there has been a huge uptake of mobile wallets and mobile payments apps. As of the past 4 years, payments for every 4 out of 5 purchases in Sweden have been made electronically.
The Banks in Sweden are also going down the cashless path. Several bank branches in the country have almost stopped accepting cash. As per the regulation jotted down targeting money laundering and terrorist financing, at the offices, which do handle cash, the customers must explain the cash source. And, thus, any suspicious cash transaction is immediately reported to the police.
The challenges for a cashless society
The Swedes are used to embracing new technologies. Their shift towards cashless and the replacement of physical wallets by the digital ones is definitely a good move and now it’s unstoppable. The strict guidelines about cash use have also pushed forward the uptake of mobile payments.
While Sweden is quite closer to cashless-ness than any other country on Earth; there are some concerns regarding those left behind by the transition. The homeless people, the elderly or the immigrants have great chances of struggle accessing the country specific digital payment services through mobile devices or even computers. Also, we do have a question, “Is it necessary to tool a thumb rule- Something is wrong if you pay in cash- for achieving a cashless society or for the growth of mobile wallets?”