Sweden is poised to become completely cashless – what does this mean for the future of payments?
Wallets are fast going out of fashion in Sweden, which could become the world's first cashless society. Swedes make about 80% of their on and offline purchases using mobile payments, credit or debit cards. But how did this radical change come about, and what's next for cashless around the world?
How has it happened?
According to a study from KTH, Stockholm's Royal Institute of Technology, Sweden's move to cashless is partly down to a revolutionary app called Swish. It's a collaboration between major Swedish and Danish banks that lets its users make speedy smartphone-to-smartphone transfers, all in real time. Some bank branches are now completely digitised and no longer accept cash.
The other big factor in Sweden's transition into a cashless society is the country's crackdown on organised crime and terror. It's claimed that digital payment systems make financial markets more transparent.
What's next?
With mobile payments like Swish rising in popularity throughout the world, it's thought that other countries could follow Sweden's lead into cashless. However, this will mean some countries' financial infrastructures will need to be revamped – any changes are likely to be a long time in the making.
Cashless hasn't completely taken over in Sweden yet, and there may be further innovation to come. Digital currency bitcoin, for example, has recently been making strides towards a more secure, safe way to pay. Near field communication, or NFC, could help further revolutionise cashless payments, installing radio technology in a shirt, ring or smartwatch. It would allow for instant, speedy payments without even needing to get your smartphone out.
What are the risks?
Scandals like the Samsung Pay hack, which saw the company's payment app targeted by a sophisticated cyber attack, have impacted consumer confidence in storing personal information online. That means, as ever, a constant focus on developing security systems will be essential for staying ahead of hackers.
Then there's the issue of too much choice putting people off. New finance apps come out daily, for everything from international money transfer to paying for yoga classes. So many options can be confusing, as most people are likely to only use one or two different payment systems, so services may find they need to synchronise. Digital wallets can be a useful solution to this, coordinating loyalty programmes and other services in one place.
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