In Sweden’s collective memory, the 2009 Västberga helicopter robbery was a national assault; an audacious heist better suited to the big screen than a grey industrial district in south-west Stockholm. It was just after 5am when a stolen helicopter landed on the roof of a fully-stocked cash depot belonging to British firm G4S. Armed with Kalashnikovs, three masked men smashed through a skylight and climbed into the building, descending on the employees working inside.
Police efforts to catch up with the thieves were slowed by their accomplices, who laid spikes in the roads and positioned fake explosives among police helicopters. Those tactics gave the robbers enough time to grab piles of cash before flying off un-scathed. Although seven men involved were later prosecuted, most of the money – approximately £5.5 million – was never recovered.
This story has become Sweden’s anti-cash parable. Västberga – which is being made into a Netflix film with Jake Gyllenhaal – was part of a wave of robberies in the mid-to-late-2000s that saw shops, banks and buses attacked. The target was always the same: cash. That lead some unions to campaign against cash as a way to protect their workers. Sweden’s largest trade union, Kommunal, says it is still pushing for all public buses to operate cash free to reduce threats faced by drivers.
More than a decade after the Västberga heist, the slide towards a cash-free society has dramatically accelerated. Sweden is among the countries where cash is used the least. At the start of 2018, just one per cent of Sweden’s GDP was circulating in cash compared to 11 per cent in the euro zone, eight per cent in the United States and four per cent in Britain. In February, Sweden’s Riksbank – the country’s Bank of England equivalent – announced a year-long pilot experiment with its own digital currency, the e-krona. This could take the country a step closer to the creation of the world’s first central bank digital currency (CBDC), although China is also working on its own digital currency.
It’s not only the unions that see the allure of operating electronically only. Many shops and cafes in central Stockholm display signs declaring themselves as cash-free zones. “It’s a lot more costly for a merchant or retailer to handle cash payments than card or electronic payments,” says Niklas Arvidsson, who researches cashless societies at Stockholm’s KTH Royal Institute of Technology. “That includes the work that is connected to cash – to count the bills, to return the change. There are also fees for cash-in-transit service companies and insurance companies have higher fees if a store handles a lot of cash since the risk of robberies increase.”
While the country’s businesses like the security and easy logistics of operating cash-free, Swedish consumers enjoy the convenience. Arvidsson says he uses his bank card when he’s buying food, clothes or cinema tickets. He also uses the payment app Swish for transferring money to friends or family or for splitting the bill in a restaurant. Launched in 2012, Swish is Sweden’s most popular payments app, backed by Sweden’s main banks and used by around two-thirds of the population.
“I hate cash. It’s dirty,” says Jowan Österlund, a 39-year-old Swedish entrepreneur. “It creates friction and risk. It kills time.” Österlund does use Swish but he believes smartphones aren’t the best way to pay. Instead his company Biohax has repurposed old technology to enable its customers to purchase products using a microchip that can be inserted into their hands, under the skin. Since the company’s launch in 2014, around 5,000 Swedes have bought Biohax chips, enabling them to pay for travel, buy snacks at their gym’s vending machine or gain access to their office with a wave.
While one section of society is ready to embrace a future without cash, there are other parts who are resisting its disappearance. Divisions in the debate have started to emerge along lines of age, wealth and location. President of Sweden’s biggest pensioner organisation PRO, Christina Tallberg, says her members can struggle to remember their PIN codes and worry about theft or scams. “If you are in a store and you pay with a card, many old people do it very slowly and they can be robbed outside the shop,” she says. “Before, when you went out with 100 Krones (£7.50) in your wallet or handbag, it was awful to be robbed but now you can be robbed of all the money you have.”
While PRO’s latest survey of Sweden’s regular supermarkets found that 99 per cent still allow their customers to pay by cash, Tallberg believes the bigger problem is the disappearance of banks where businesses can deposit bills – especially in rural areas. Today, more than 280,000 people need to travel over 20 kilometres to visit a cash deposit machine. “We have more than 1,200 local branches all over the country,” says Tallberg. “When we have branch meetings, we have 100 or 200 people coming and everyone wants to buy a coffee or a sandwich and to pay using cash. That’s a lot of money and often our volunteers are having to travel long distances to make a deposit. It would be better if they could do that at the local bank.”
For years, Sweden’s cash-free-status was held up as an example of classic Scandinavian superiority. But lately that status has started to sour. In 2019, the annual report published by British group Access to Cash used Sweden as an example to demonstrate the “dangers of sleepwalking into a cashless society”.
“What we found is the country is becoming increasingly digital and cashless without planning to do so,” said Access to Cash chair Natalie Ceeney “What we’ve found in our research is the vast majority like digital payments. They work for most of us. But there’s a small segment of society they don’t work for.”
Ceeney outlines how that segment includes people on low incomes, who feel cash gives them greater control, enabling them to prevent their remaining money being eaten by direct debits. For people living in rural areas, often the infrastructure doesn’t exist to rely on digital payments. And charities report how cash enables people who experience domestic abuse to hide money away if their abuser has taken control of their bank account.
The Swedish parliament seemed to agree with at least parts of the Access to Cash report; the shift was happening too fast and cash needed to be protected. In November 2019 – all parties except one – voted in favour of a bill designed to preserve cash; requiring banks to ensure people had access to nearby ATMs and businesses could still make deposits. Yet cash advocates said the law would make little difference, arguing retailers’ attitudes were more likely to kill cash than ATM-access. A study by the Swedish Retail and Wholesale Council showed half of retailers said they probably won’t accept cash after 2025.
The idea that Sweden’s slide into cashlessness might now be unstoppable has forced the country’s central bank to act in order to stay relevant. “If nothing is done, this development will very likely lead to the general public no longer having access to state-issued money, Riksbank money, which is the most secure form of money existing,” the bank said in a 2019 report.
A financial system dominated by private banks without central bank anchorage would risk returning Sweden to a chaotic period of history, says KTH’s Niklas Arvidsson. “Riksbank has had a monopoly on Swedish cash since 1904,” he says. “Before that, each bank could have their own version of cash and the cash from one bank could depreciate or be inflated given their economic strength. In the end, it became very messy with different banks providing different rates, like having a lot of different currencies in the same economic region.”
In the current financial system, cash provides an anchor to stability; it’s the central bank’s guarantee that money still has worth – which is why people make withdrawals when they believe their bank is about to go bust. The Swedish Civil Contingencies Agency – the Ministry of Defence department that plans for national emergencies – still advises people to keep “cash in small denominations” to ensure they can access money in case of natural disasters, power outages and cyber-attacks.
“If cash was not there anymore, we would need a digital technology to hold up to that promise as well as cash does,” says Rainer Böhme, a professor who specialises in virtual currencies at Austria’s University of Innsbruck. “If you have money in a private intermediary [a commercial bank or app such as Swish], it’s not a direct claim to the central bank. If that intermediary turns bankrupt or turns malicious, consumers have less protection.”
Riksbank has envisioned their CBDC would act as a "complement to cash" – not a replacement. Details released about the e-krona pilot reveal it will include “simulated users [who will] be able to hold e-kronor in a digital wallet, make payments, deposits and withdrawals via a mobile app”. To some, that suggests a Swedish CBDC could wrestle market power away from commercial banks which were found to be too dominant in the financial crisis. “This is not something we would consider in the UK or The US. We’re too light touch,” says Carsten Sørensen, who runs the London School of Economics’ Cryptocurrency and Disruption course. “But the state there [in Sweden] is a much stronger entity in society.”
Sørensen emphasises this is an experimental period for Riksbank. “This is a massive design exercise,” he adds. “It’s the central bank’s job in any country to work out, what is our role going to be? Are we going to accept money is going to be privatised? And if we end up having privatised, decentralised currency, how can we regulate that?” According to Riksbank, the pilot will be up and running this time next year – although the bank says adjustments due to the current Covid-19 crisis could not be ruled out.
But recent attempts by both the bank and Sweden’s Parliament to shape the country’s cash-free future marks a shift in attitude. Many Swedes might have already decided they prefer a future dominated by digital payments but the country’s institutions are trying to have more of a say in what exactly that future will look like.
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This article was originally published by WIRED UK
