One Swede Will Kill Cash Forever—Unless His Foe Saves It From Extinction
Swedes exist in a kind of sped-up timeline, where tomorrow happens yesterday.
His options, in fact, were fairly limited. What this man had somehow failed to notice was that his country is at the forefront of a global economic shift. As pads of paper are to the modern-day office, so cash is to the world of finance: increasingly unnecessary and vanishing from sight. Some countries are embracing this future faster than others. The United States is about halfway there, at least in one sense: According to the Federal Reserve, Americans use cash for 46 percent of their transactions, preferring for the rest the convenience of plastic, check, or the mobile payment apps on their smartphones. The explosion of digital finance platforms, from Square card readers to services like Venmo, Apple Pay, Google Wallet, and PayPal, has made spending as easy, fast, and pleasant as sending a text. To some this may seem unnerving, but even amid security concerns over data breaches and identity theft, a world without cash seems inevitable, if not imminent.
But Swedes exist in a kind of sped-up timeline, where tomorrow happens yesterday. They number so few—10 million, about half the size of Los Angeles—and their IT infrastructure is so sophisticated that the entire country can pilot-test new developments, new systems, new futures practically overnight. In the process, Sweden has become a small peninsular slice of society to come—much like San Francisco, though cleaner and even better connected. Stockholm just announced it will be among the world’s first cities with a 5G mobile network, and most of the country is on track to have ultra-high-speed Internet by 2020. But then, Sweden has been in the vanguard for quite some time. More than 350 years ago, it became the first European nation to print paper money. Now it could be the first to phase it out.
Unless cash defenders get their way, that is. Even in Sweden, change isn’t easy. Two powerful men stand at the crux of this massive transition, facing off in a national debate about the value of physical currency in the 21st century. This being Sweden, they are both named Björn.
Money, money, money Must be funny In the rich man’s world Money, money, money Always sunny In the rich man’s world
In the 1976 music video for Abba’s “Money, Money, Money,” Björn Ulvaeus, who wrote the song with bandmate Benny Andersson, sports a shaggy haircut and a rhinestone-trimmed satin kimono. Forty years later, he’s a more soberly dressed multimillionaire with a house in Stockholm’s swankiest suburb, Djursholm, discovering that money might not be so funny after all. Meet Björn number one, the face of Sweden’s cash-free movement.
Ulvaeus’ radicalization dates back to the events of October 25, 2008, when burglars tried to break into his son Christian’s apartment. They failed, but Christian was spooked. He started glancing around corners in his own home, nervous they’d be back. A few weeks later, they were. While Christian was at work, two men came in through the balcony and stole his cameras and a designer jacket.
It wasn’t a devastating haul, but Christian was shaken enough that he decided to move. For his dad, the whole episode was an outrage. “I started thinking they took these things, and they went somewhere and they got bills, paper bills,” Ulvaeus says over lunch at a deli near his home. “What if there wasn’t any paper money?”
So Ulvaeus, who retains influential pop idol status (at least in Sweden), began writing opinion pieces for newspapers and websites. His argument was simple: The criminal economy depends on the anonymous, untraceable nature of cash. Indeed, much of the cash in the world, maybe most of it, is simply unaccounted for. The World Bank estimates that about a third of the cash in most countries circulates underground, in black markets and through illegal employment. Take it away and thieves have no foolproof way to sell their stolen goods, drug dealers no way to hide their deals, and eventually the whole shadow economy collapses.
The more Ulvaeus thought about it, the more logical it seemed and the angrier he got. Attachment to cash was not just nostalgic but irrational, even dangerous. In 2011, Ulvaeus stopped using paper money completely—and hasn’t touched the stuff since. Two years later, when he cofounded the official Abba museum in Stockholm—a glittery establishment where visitors can insert themselves into music videos and shop for band-approved golden clogs—Ulvaeus insisted that no cash be accepted on the premises. On opening day, signs stood in the entrance and in the gift shop that read:
I challenge anyone to come up with reasons to keep cash that outweigh the enormous benefits of getting rid of it. Imagine the worldwide suffering because of crime, from drug dealing to bicycle theft. Crime that requires cash. The Swedish krona is a small currency, used only in Sweden. This is the ideal place to start the biggest crime-preventing scheme ever. We could and should be the first cashless society in the world.—Björn Ulvaeus
Ulvaeus’ crusade added just the right amount of star power to a larger, more coordinated effort already well under way. Several years earlier, the banks of Sweden had gotten together for the express purpose of weaning Swedes off bills and coins, under the banner of crime reduction. They began running a “public safety campaign” that encouraged people to buy things with cards instead of cash, lest they risk a curbside mugging; they also started emptying their own vaults of physical currency. The move had an intuitive appeal for most Swedes: As safe as the country is, it’s constantly looking for new ways to eliminate crime completely.
Then, around the time Ulvaeus opened his museum, the banks created an app called Swish. Swish is what really sets Sweden apart, even among its similarly low-cash, high tech Scandinavian neighbors, because it replaces cash in the last kind of transaction where it had been most convenient: person-to-person payments. A souped-up Venmo, Swish moves money instantaneously between users’ bank accounts, no processing time required. All you need is someone’s phone number. Since its launch, nearly half the population has started using the app; in December of last year, Swedes Swished some 10 million times. Even small businesses now accept Swish payments, as do some homeless people selling magazines on the streets of Stockholm (though if you don’t have the app, they usually carry portable card readers too).
This new activism by the banks, along with the support of Ulvaeus, transformed Swedish society in just a few years. In 2010, 40 percent of Swedish retail transactions were made using cash; by 2014 that amount had fallen to about 20 percent. More than half of bank offices no longer deal in cash. To his claim that going cashless is the “biggest crime-preventing scheme ever,” Ulvaeus now has some statistics to back it up. The Swedish National Council for Crime Prevention counted only 23 bank robberies in 2014, down 70 percent from a decade earlier. In the same period, muggings dropped 10 percent. While it’s unclear the extent to which the transition to cashless has affected the rate of street crime, police point out that there’s a lot less incentive to rob a bus driver, cabbie, or shopkeeper if they don’t accept cash. Many workers say they now feel much safer.
Still, Ulvaeus is not satisfied. He’s annoyed there’s any cash left in Sweden at all. “Why would you pay for things with paper symbols that can be forged, that can be used in the black economy? It’s so unmodern,” he says. “It’s so out of touch.”
Unmodern: It’s one of Ulvaeus’ favorite, most biting insults. In some ways he has spent his whole life chasing modernity. In his earlier years, he wanted to be an engineer and taught himself to code on his Atari. Musical superstardom derailed those dreams, but Ulvaeus never abandoned that side of himself. “Pop music has always been driven by technology,” he says. “Every new sound, we were like, what are the Bee Gees doing there? We have to get that!” He’s never been someone who romanticizes the old way of doing things; retro is lame. He idolizes modern-day boundary-pushers such as Elon Musk and professional atheist Richard Dawkins.
Ulvaeus believes, with a conviction bordering on zealotry, that once the world sees Sweden and the rest of Scandinavia transform into a cashless, crimeless utopia, with tax revenues soaring, it will have no other choice but to follow suit. Take Greece, a country Ulvaeus has a special connection to (see: Mamma Mia!). “My God, what good it would do that country to be cashless,” he says. Corruption, tax evasion, the black economy: They could vanish. “I know it’s going to happen. I’m impatient. I want to see it!”
Lunch is over. Ulvaeus pays for his fish with a black elite MasterCard and drives off in his Tesla.
Overturning a centuries-old system so quickly is not without its challenges. Weird things start to happen at every level of society. To wit:
- Sweden held its first major cashless music festival in the summer of 2014, and organizers provided attendees with special high tech wristbands for in-festival purchases. On the first day, the electronic payment system crashed, leaving thousands of thirsty festivalgoers unable to buy beer and forcing some vendors, one newspaper reported, to use a rather unmodern form of payment: paper IOUs.
- In a curious case of an “e-mugging” on the Swedish island of Gotland last July, the victim told police he’d been forced to Swish money to a thief. The accused was easily identified—Swish requires a name and phone number—but when police found him, he said the transaction was just a friendly payment for beer. The police didn’t have enough evidence to bring the man to court, so the alleged e-mugger walked free.
- Over the holidays, two young Russian tourists tried to board a bus and pay on board. The driver refused to take their bills. “We took out all this kronor when we got here,” one of them said as she walked back to the station, dejected. “It’s all still with us.”
- In Överlida, a small town in western Sweden, a third-party ATM wasn’t hitting the minimum number of transactions, so the operator threatened to charge the bank extra fees. To prevent that from happening, bank employees stood next to the machine, paying 100 kronor (about $12) to anyone who would use it.
- In Skoghall, a rural town north of Stockholm, the locals campaigned for an ATM to be installed at their grocery store after all the others in town were decommissioned. When they finally got one, they threw what may have been the world’s first ATM party. A live band performed a Swedish rendition of Monty Python’s “Always Look on the Bright Side of Life,” singing, “Weee haaave a neeeew ATM,” while people cheered and a man on the roof showered celebrants with candy.
- Making a cash deposit is now cause for suspicion—even if you’re a priest. New anti-money-laundering laws force tellers to ask detailed questions about where the cash comes from, and some banks enforce strict limits on maximum deposits. This means tithes often leave churches with more cash than they can handle, especially after big hauls during Christmas and Easter.
- The Swedish government’s supposedly impenetrable mainframe was infiltrated in 2012 by a hacker who stole citizens’ personal data and used it to gain access to private accounts at Nordea, Sweden’s largest bank. Gottfrid Svartholm Warg, Sweden’s most famous cybercriminal and a cofounder of Pirate Bay, was convicted of the crime and served a year in jail.
- In 2014, a security researcher discovered a major flaw in Swish’s design that gave him instant access to any user’s transaction history. He alerted the banks, which fixed the bug right away. Nobody noticed—until the good hacker posted about it on his blog a few weeks later.
Crime is the single most important consideration in the global transition to cashless. That’s why Björn Ulvaeus is constantly talking about public safety. So you might think the former president of Interpol—the International Criminal Police Organization—would be on Ulvaeus’ side. He is not. Meet Björn number two, the leader of Kontantupproret, or Sweden’s Cash Uprising.
Björn Eriksson is a big man, with winged eyebrows and fluffy gray hair. When he sits down, he seems to do so reluctantly, as though he would much rather stay standing, or have a walking meeting in which he would walk very fast.
He and Ulvaeus share more than a first name. They were both born in 1945 and so turn 71 this year. But if time has radicalized Ulvaeus, it has hardened Eriksson.
In the early ’80s, when Eriksson was working in Swedish customs, he sniffed out a covert police operation to smuggle illegal bugging equipment through the country. The police commissioner resigned soon after, and Eriksson was tapped to take his place. He remained in law enforcement for the rest of his career, spending time as head of the Swedish police before his appointment to the Interpol presidency. Although he’s technically retired now, it never occurred to him to stop working. Of the many causes he’s still involved in, the “cash problem,” as he calls it, is where he invests most of his energy. He sees corruption, deceit, and security risks everywhere.
Consumers are not shaping Ulvaeus’ utopianist dream of a cashless future, Eriksson says; the banks and credit card companies are. After all, it was the banks that pushed people to use cards in the first place; and it was the banks, not some independent tech startup, that created Swish. The cost-benefit is obvious: Cards, with their hidden costs and fees, make banks money, whereas vaults of bills and coins do not. In fact, cash costs banks money. It must be handled, counted, transported, guarded, and counted again. As Niklas Arvidsson, an economist at Stockholm’s Royal Institute of Technology, puts it: “It’s clear the banks have a business incentive to reduce the use of cash.” Time is money, and money takes time.
True bank robberies and muggings have declined, but fraud and identity theft have gone up.
But for the most part, Swedes are not a cynical people. They like technology and trust their government and institutions. As the numbers show, most of them have been perfectly happy to renounce cash. In fact, many hardly seem to notice what’s happening at all, so convenient the changeover has been. That’s what concerns Eriksson most: not so much the opportunism on the part of the banks, which seems inevitable, but the thoughtlessness with which so many Swedes seem to have flung themselves—as though to the merry tune of “Dancing Queen”—into an uncertain, possibly unsafe future.
So last year, Eriksson started Cash Uprising, an organization whose core mission is to save the paper krona from extinction. Its members are mostly people from rural areas, small-business owners, and retirees—the ones, in other words, for whom the sudden departure of cash has been inconvenient enough to force them to stop, take notice, and worry.
Camilla Kristensson and Lars-Erik Olsson live in Gärdslöv, a cluster of houses in southern Sweden too small to be called a village. (Olsson estimates the population “in town” is about 22.) Kristensson and Olsson are treasurer and president, respectively, of the Gärdslöv cultural council, which hosts events like mushroom foraging and charcoal making. After one such event last summer, Kristensson had about 20,000 kronor to deposit in the council’s account. But when she went to the local bank, a 10-minute drive away, it refused her cash for the first time ever. So she had to start driving 40 minutes into the city every month to deposit as much money as she was allowed, storing the remainder in various hiding spots. What makes her and Olsson angry isn’t just that the bank stopped taking their cash—it’s that it happened so quickly, without regard for how it would affect people like them. “They changed it almost overnight,” Olsson says. “We need time to change.”
Now Olsson’s council is part of Eriksson’s coalition of cash activists, who hold meetings, circulate petitions, and generally make noise about cash access. Ulvaeus, who has little patience for Eriksson’s views, describes the uprising as “Eriksson and a vanguard of geriatrics,” which is not altogether untrue, but they are some of the only voices speaking up for the consumer in this massive economic shift. The Swedish government has held several hearings on how to regulate the future of cash that were largely prompted by the work of Cash Uprising, and this September the parliament could vote on a bill that might require banks to provide cash services. (In a surprising victory for the movement, the head of Sweden’s central bank recently lent his support to such a proposal.)
Eriksson does have another role in all this: He’s the chair of a major private-security lobby, an industry that a recent economic study called one of the “biggest losers” in a cash-free world. Among other things, security personnel guard vaults and protect cash. No physical cash equals no more jobs. Everyone has an interest, Eriksson says, but he believes his are at least aligned with those of the consumer.
Cash is security, he says. You can hold it in your hands; it can be protected. Spending it does not entail sharing personal information with credit card companies, app creators, or banks. It is true that bank robberies and muggings have declined in Sweden in the past few years. But according to crime statistics from the same national organizations, cases of fraud, usually involving identity theft, have more than doubled. And that stat is based only on cases reported to the police. Most banks won’t publicly share how often their customers’ card information is stolen or their systems breached.
It’s a good bet that the numbers are higher than consumers would like them to be. While Swedes swipe and Swish their money away, they open themselves up to new risks—cybercriminals who would either trick them into divulging sensitive information or exploit security flaws to steal their identity outright. “We see that cybercrime is becoming more aggressive,” says Ulrika Sundling, chief inspector of the Swedish police’s cyber-investigations unit. And she says consumers, generally unaware of the threat and therefore unmotivated to take extra steps to protect themselves, are the “weakest link.”
Eriksson has been hounding Sweden’s banks for years, convinced they’re hiding exorbitant sums of lost money for fear of bad publicity. He even bought single shares of stock in different banks so he could go to shareholder meetings and try to get his questions answered. “They don’t like me,” he says, grinning. For their part, the banks say they keep this information close for customer security. According to Gunilla Garpås, a senior business developer at Nordea and one of the creators of Swish, more transparency about cases of cyberattacks, fraud, and the banks’ defenses against them “would really be putting ourselves and our customers at risk.”
Eriksson’s suspicions don’t stop at the banks. He believes MasterCard’s sponsorship of the Abba museum is the reason Ulvaeus is such a dedicated anticash advocate—but Ulvaeus wrote his first articles on the subject long before the museum opened. That is not to say MasterCard isn’t capitalizing on this moment, though. The card company also heavily sponsors iZettle, the most popular mobile card reader in Sweden.
Last October, American retailers made the switch to chip readers. (Well, they were supposed to, but the rollout has been uneven, and some stores still allow the old swipe-and-sign method.) You likely received new chip-enabled cards from your bank as a result. The upgrade came after a year of high-profile hacks: 56 million credit and debit card numbers stolen from Home Depot, 40 million from Target, another million from Neiman Marcus. The “new” chip technology—which has been standard in the European Union for more than a decade—is intended to make electronic transactions safer and more secure.
Then, this March, several major US banks announced a new digital payment platform called clearXchange. (A better name is reportedly in the works.) It is, finally, the US equivalent of Swish: a bank-backed service that lets people transfer money from their bank account directly into someone else’s.
These moves will help speed up the decline of cash use in the US, which hasn’t seen significant change in the past few years; electronic payments have hovered around 50 percent of all transactions. Americans tend to be less trusting of their institutions than their Swedish counterparts—and for good reason. Strict privacy laws safeguard Swedes from unwanted invasions, but consumer protections in the US are considerably flimsier. As Jay Stanley, a senior policy analyst at the ACLU’s Speech, Privacy, and Technology Project, puts it: “We have a hurricane of data, and we’re living in a shack.” Plus, many Americans simply don’t want banks or the government to know what they’re spending their money on (thus the appeal of cryptocurrency like bitcoin).
But don’t be fooled: Economists have been predicting the end of physical currency for decades, and Sweden’s transformation signals the time is nigh for the rest of the world. Americans may cling to their bills and coins with greater tenacity than Swedes do, but in that reluctance is an opportunity to proceed cautiously and look to Sweden for guidance.
Ultimately, Sweden’s two Björns want the same thing: a safer society. The world is going cashless, as Ulvaeus says, but consumers have to feel more secure in this new order, per Eriksson. They’re not so much rivals as complements.
Not that they see themselves that way, set as they are in their inflexible views. Offered the opportunity to get dinner with Eriksson and maybe hash out differences over schnapps, Ulvaeus thought about it for a few seconds before saying, “No, I don’t think that’s a good idea. I might get angry.”
Which is probably just as well. Imagine them fighting over the check.