Does going cashless let Big Brother monitor your money?
Published by The Mail on Sunday (14th July, 2019)
Gustaf can remember the precise date when he last used cash. ‘It was October 7 last year,’ he told me without hesitancy. ‘I found an old note that I had forgotten about and used it to buy some sweets.’
Like many others at his university in Gothenburg, Sweden, Gustaf relies on cards and smartphones to spend money. ‘None of us use cash – you just don’t need it these days,’ he said.
But there is one problem – a big one. The 20-year-old computer science student keeps losing his bank cards, along with others that swipe open electronic locks for his apartment, gym and lecture halls. ‘I laugh about it but it is very inconvenient.’
So he plans to get a tiny microchip, scarcely bigger than a grain of rice, injected into his hand which he says will make life easier as well as being ‘cool and futuristic’ – following the lead of at least 4,000 other Swedes as their country hurtles into a brave new world without hard cash.
They have chips inserted under their skin – usually above the thumb – to pay for their coffees and bus and train travel, waving a hand across payment machines as if using a contactless card.
This blending of human beings with technology sounds like science fiction. Yet it comes as this Nordic nation – the first in Europe to issue banknotes more than 350 years ago – leads the global march into a cashless society.
Britain is close behind, coming third in a recent analysis of cashless economies, with barely a third of retail transactions still made in notes and coins. Even pubs and cafes have started to go cash-free, while about 300 cash machines close each month.
It’s a headlong rush that has alarmed many in the UK – and prompted the MoS to launch the Keep Our Cash campaign. ‘If we don’t take action now in this country, we’re only a couple of years away from Sweden,’ warned Natalie Ceeney, the former financial ombudsman who headed a review on access to cash published earlier this year.
Notes and coins represent just one per cent of the Swedish economy, compared with an average of ten per cent across the rest of the continent as cafes, shops and even banks stop taking cash.
After eating a prawn salad at Glashuset, a smart seafront restaurant in Stockholm, I asked my waitress if they still took old-fashioned money. ‘Yes,’ she replied. ‘But we stop this weekend. We are Swedish – no one uses real money any more.’
I heard this mantra repeatedly. Susanne Dahlberg, 53, a technology manager, even said that when she had to get cash out last year, she thought the notes were foreign. ‘I realised it was the first time I’d seen a new series of bills released three years earlier.’
At the Hotel Kung Carl, where former Sweden and Leeds football star Tomas Brolin was hosting his 50th birthday party, one guest confessed he had to be bailed out by his girlfriend as he only had cash, which was not accepted at the bar.
Barely one in ten Swedes used cash last year for purchases, according to a survey – down from four in ten in 2010 – while the total value of banknotes and coins in circulation over the same period has almost halved.
The case for going cashless is based on convenience and cutting crime. Even the Abba Museum, shrine to the band that sang Money, Money, Money, rejects notes after one member of the group became a prominent advocate when his son’s flat was burgled.
‘It made me think: What would happen if this was a cashless society and the robbers couldn’t sell what they stole?’ said Björn Ulvaeus.
So now the man who co-wrote possibly the world’s most famous song about money never carries cash – while a local journalist told me that the switch to digital had pushed buskers and beggars off the streets.
Furniture giant Ikea is also following the trend, announcing last month that its store in Gävle, about 100 miles north of Stockholm, would be the first to abandon cash after a short trial found the move freed up 30 minutes a day for frontline staff.
There were a few complaints, mostly from customers in the canteen – so managers gave them free hot dogs or meatballs, then asked them to carry a card next time.
But not everyone is enthusiastic. There is growing resistance from groups such as pensioners – who say they are being left marginalised – while experts warn about grave security implications for both individuals and the State.
The Swedish Civil Contingencies Agency has urged citizens to keep some cash in small denominations for use in crises such as power cuts, cyber-attack or war.
This followed a suspected Russian cyber-attack on Latvia, just over the Baltic Sea. Big energy blackouts in places such as Canada and the United States have also shown the need for cash during emergencies when the internet is unavailable.
There is another, more familiar, problem with relying on futuristic technology: it may not live up to the claims – as discovered by Eric Orlowski, a social anthropologist who had his hand ‘chipped’ while studying these innovations.
Orlowski found the microchip was incompatible with many other systems so has ended up using it for little more than activating the alarm in his parents’ home in southern Sweden. ‘There is a lot of hype at the moment,’ he concluded.
The backlash for cash began with pensioners and people with disabilities fretting over unfamiliar technology and preferring currency to the burgeoning array of credit cards, debit cards and smartphone apps on offer.
Former banker Hans-Uno Broström, 74, does not own a computer, despite ending his career in Handelsbanken’s IT department, where he saw the push for electronic money. He uses a card only for costly items and walks out of stores rejecting cash.
‘I think the cashless society is very bad for the youth since they do not learn to understand how to take care of their economy,’ he said. ‘They don’t learn debit and credit; they just think money is there to use. Many end up indebted.’
Now he worries his ferry to Granholm, a peaceful small island without cars an hour from Stockholm where his family has had a summer cottage for three generations, might stop taking cash payments. ‘Maybe it is time to start an uprising,’ he joked.
The Swedish National Pensioners Organisation estimates that about one million citizens share Broström’s dislike of the move to digital money – a substantial minority in a small nation of ten million. An estimated 140,000 elderly people still use only cash.
‘This issue keeps coming up when I’m out meeting people,’ said Jan Andersson, its vice-president and a former MEP. ‘Small bank offices do not have cash any more, while there are also fewer and fewer cash machines.’
Andersson’s father was a night-time bus driver, so he sees the benefit of ensuring such people are not handling large sums that make them vulnerable to crime. ‘But we talk a lot in Sweden about freedom of choice,’ he added. ‘You should also have free choice to use cash or your card. That is no longer the case.’
He tried to take cash from a bank in the coastal city of Helsingborg, only to be told to travel 40 miles to Malmö. ‘An ice-cream kiosk owner opposite the bank then told me he no longer takes cash because he can’t bring coins there. This shows the wider effect of these decisions.’
At least 900 of Sweden’s 1,600 bank branches no longer handle cash, and critics say their bosses pushed the shift to make bigger profits, while ministers are seeing higher tax receipts as the black economy gets squeezed.
This bank profiteering was highlighted by Roger Elbling, owner of a tobacconist and sweet shop in Stockholm, while serving customers in his Sweden football shirt.
Elbling said that just one in ten of his customers uses cash today, compared with about eight in ten five years ago. Yet it costs him 500 kronor (£42) to pay 100,000 kronor (£850) in digital cash into a bank, compared with 150 kronor (£13) for the same sum in cash.
‘It’s great for the banks because they do less work and make more money,’ he said. ‘When banks in other countries see how much ours are making, trust me they will all do the same.’
So when did he last use cash, I asked. He smiled and paused to ponder before replying: ‘I think it must have been when I was on holiday in Germany because I never use it in Sweden.’
Yet even technology student Gustaf admitted there were two camps at his university: one that saw cash as obsolete, pitched against a smaller group that feared handing over so much highly personal data to private firms and state agencies.
One critic told me that when he asked friends if they ever used cash, they said only when buying alcohol from the state monopoly since it was ‘a bit embarrassing’. As he pointed out, ‘this innocent example shows they fear the data can be misused’.
Fans of digital cash accept such concerns. ‘We are complacent but it’s just so convenient,’ said Malva Furst, 37, an art director who had just bought her four-year-old daughter Kay an ice cream on her card. ‘Yet I do worry about data.’
Although Swedes trust business and politicians more than in most Western nations, assisting this rapid shift from cash, such privacy concerns have been intensified by a series of recent outrages involving data abuse and failures by technology giants.
The Facebook scandal last year over Cambridge Analytica highlighted how such data can be harvested and sold on to advertisers, secretly turning customers into valuable commodities.
Some experts have deep concerns. ‘In a society where you can’t buy anything without trace, or even possess money, then that is a less free society,’ said Svante Linusson, a maths professor at KTH Royal Institute of Technology.
‘Small payments may not matter but when you put them all together, you build a big picture,’ he said.
‘This changes society fundamentally. If I cannot give my friend 500 kronor without the State knowing then we are handing over too much control.’ He also worries about parents being able to track precisely how teenagers spend money and about women trapped in controlling relationships.
‘I know of one woman who had to buy something she did not need from a store, then take it back to get cash so she would not be interrogated by her partner,’ he said.
Linusson said he always tried to use cash in shops. ‘My friends say it is only me and a few old people that really care but I reply there are big concerns over data and electronic money.’
The fiercest critic is Bjorn Eriksson, who as a former national police commissioner, customs chief and head of Interpol, the global crime-fighting body, might have been expected to embrace the shift towards traceable cash transfers.
Instead, he heads Kontantupproret (Cash Rebellion), claiming this is a fight between people and the elite. ‘The establishment seems angry some people still talk about cash but many people are angered by what is happening. I see resistance growing.’
Eriksson argues there are three key concerns – inequality for those who dislike digital cash or live in rural areas with limited internet; state security at a time of rising regional tensions; and control by autocratic governments of their citizens.
‘Already in China these things are being used to reward or punish citizens for their behaviour,’ he said. ‘We are not likely to see this sort of control being used in the United Kingdom or Sweden just now but this should still be a serious worry for society.’
He accepts there is no longer any point robbing banks; the number of heists in Sweden fell from 110 in 2008 to just two last year. But identity theft has surged, especially from elderly people, and electronic fraud cases more than doubled over this period.
‘We have seen a dramatic increase in identity and cyber theft which hurts society more than the old types of crime. We see people trying to get hold of old people’s data, then stealing all they have. Banks are safer – but is society really safer?’