For a while there, it looked like Sweden might well be the first cashless society in Europe, if not the world outright. The country had been enthusiastically taking to mobile payments and putting these to use with a fervor to top most anywhere else. New reports have emerged, however, to suggest that Sweden may have found some unexpected trouble with the move, which is happening faster than it really expected.
The biggest problem with the increasingly cashless society in Sweden, reports note, is that people are taking to mobile payments and similar measures with such rapidity that the entire cash infrastructure—what of it is actually left—is falling apart. Restaurants, stores, and even bank branches are refusing cash and refusing to handle cash, a development that’s leaving late adopters like the elderly or the unbanked out in the cold.
This process in turn may not be only hurting those who are no longer able to buy food or various services, but also may be hitting businesses as well; losing that business could be a problem, depending on the percentage of business that relies on an actual cash trade. This is prompting further review from the Swedish government, and the final report may be available as early as this summer.
We’re all in favor of mobile payments out here, and with good reason. They’re a great option for people who don’t want to carry cash around for any of a dozen good reasons from cleanliness to safety. But in all honestly, mobile payments needs to be an option. As we’ve noted among the reasons to accept mobile payments, it provides one more option for customers. The more options a business can provide for customers, the more likely that business is to find an option that’s appealing to customers. When mobile payments are used as a complete surrogate for cash, the ultimate purpose is self-defeating. Giving a new option just to take one away doesn’t give customers new options, it just gives them different options, and that doesn’t have the same impact.
Cash is a mobile payment system too, quite possibly the original mobile payment system. By taking cash away completely, that removes one valuable and productive option for the user. That’s counterproductive, and in the end helps no one.
Ellie Dautner, a finance postgraduate from the University of San Diego, is an expert journalist in fintech and mobile payment technology. She specializes in writing about fintech, mobile payments, startup funding, and acquisitions.