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“It seems to me that if the cash completely disappears it would be a big problem … I’m afraid it’s going too fast … it’s a big concern to feel that society is not for you anymore.”
Maijlis Jonsson, an inhabitant of the 73-year-old center of Stockholm, leads an active life with her friends. But there is a problem that does not stop causing stress.
Sweden has been steadily advancing for years towards a cash-free society, which is already used in only one out of every five transactions in stores , half as much as five years ago.
The country has already eliminated bus tickets and coins, and many tourist attractions only accept card payments .
The law says that stores can refuse cash, so many have a sign warning them. Life can be hard for those who do not want to or can adapt to change.
Maijlis Jonsson is one of those people. She has to go to a bank to return her friend a train ticket bought online.
“Generally, the rate is 79 crowns, which is about US $ 9,” he says. “It’s a lot of money … of course, they always say you can do it for free on the internet, but it’s a problem … some of us do not know how to do it.”
Jonsson tries to pay for a cup of coffee, but the cashier refuses. ” I did not want to receive my money , so I have to pay with a card,” he says, adding that, in any case, ATMs are becoming increasingly difficult to find in Stockholm.
Niklas Arvidsson, a professor at the KTH Royal Institute of Technology and expert on payment systems in Sweden, recognizes that certain demographic groups are at risk of falling behind, like the elderly.
“We also have a problem with smaller merchants in rural areas, where perhaps telecommunication systems do not work,” he says.
Death of cash and changes of power
Is Sweden benefiting from all this? According to Arvidsson, yes.
“If you look at it from a macroeconomic perspective, then yes,” he says.
“Electronic transactions are faster and cost less in general, and make the payment system more efficient .”
He also points out that “it’s a bit more difficult in general for people to get away with it [not] by paying taxes or doing small robberies without cash.”
However, as with all movements into unknown territory, who has the power ? Will we be handing it over to a small number of private companies that have the keys to how these payment systems work?
It’s a risk, admits Arvidsson.
“We could end up in a situation where some commercial banks hold a lot of power,” says Arvidsson.
“The counterforce to that is the growth of technology companies, the development of services that can compete with banks, and hopefully a very competitive market will remain where we do not see oligopolistic profits, and then too much power rests in the hands of a few actors. “
But Sweden is not the only country that contemplates a future without cash.
Brutal step of India?
India is looking to move away from traditional cash transactions. But some say he took an extreme step, perhaps brutal, to force people to accept digital transactions.
The government has withdrawn some high denomination banknotes more than a year ago. The movement hit the economy and many poor people albeit for a short period.
The Indian Prime Minister, Narendra Modi, created dozens of municipalities without cash where bills and coins are discouraged.
There is even a government ministry dedicated to driving change.
But India is a vast country with an estimated 270 million people below the poverty line. Is a future without cash even desirable if it is possible?
Monika Halan, editor of the financial newspaper Mint, based in Delhi, says the government is motivated by a variety of factors.
For Halan, it has to do in part with taking strong measures against the money earned in the black market, as well as in the financing of terrorism.
But it also has to do with the inclusion and development of the financial economy.
“There are reasons why people would not enter a bank branch,” he explains. “They were afraid that they would make fun of them or because their bills are dirty, they did not have the confidence that they would be treated well by the bank’s staff.”
Halan also points out another problem: banks in rural areas do not have adequate staff or resources .
“If you look at the way people save in the poorest parts of the country or even in the urban informal sector, it’s really a lot of informal funds, and a lot of people lose that money,” he says.
“People want their money to be safe,” he argues, “so he wants to put his money in banks instead of having it at home.”
“You must provide banking services to the poor in the way they want, not the way they are given.”
Halan also describes how digital banking through cheap mobile devices has leveled the playing field for less affluent service providers.
As soon as the price of cell phones fell, street vendors, carpenters, sweepers bought them to increase their business.
Thanks to these tools, they can now do what the rich and the elites do.
Payments and privacy issues
Of course, with an increase in digital transactions, the issue of data security comes into play.
As we go in free fall for an increasingly virtual world – and payments in the cloud instead of paper payments – the question arises as to who has access to our information .
For Monica Halan, it is a global challenge without an easy solution.
“I think those are the problems that the whole world is dealing with Facebook,” he says.
“The government and regulators have to act very quickly to close the leaks of data that are emerging around the world, and even in India.”
In any case, Halan remains very optimistic regarding these policies towards the elimination of cash.
“It’s as if a virtual infrastructure is being built … if a highway or a railway has the ability to bring business people closer together and increase production, so will technology,” he says.
“Once the technology genius is out of the bottle, how do you put it back in?”