Björn Ulvaeus at the heart of the cashless society debate in Sweden (Updated)
As visitors to ABBA The Museum know, Björn Ulvaeus would like your money but not your cash. He insists that you pay for everything from your entrance fee to souvenirs from the museum shop by credit or debit card. This move has put Björn at the heart of the debate for a cashless Sweden.
Now that the museum is roughly six months old, Björn has spoken to the Swedish financial media outlet ‘Dagens industri’ about the story so far and renews his plea for a cashless Sweden. The publication features arguments from both sides. This is Bjorn’s in his own words:
“Banknotes and coins are expensive to manage, contribute to crime and are unhygienic. At ABBA The Museum we decided from the beginning not to accept cash as payment. It has been shown to work very well,” says Björn Ulvaeus.
“In today’s news, I read the headline ‘one in every eight homes affected by break-ins every year’. The article talks about all possible prevention measures except one. It is the easiest to implement and absolutely the most efficient – remove the cash in society. At the moment, nobody has been able to explain to me what the thief is going to do with what he or she stole in the villa or apartment unless it can be turned into cash.
“Early on we decided that ABBA The Museum would take the lead in the move towards a cashless society. There were many ‘Cassandras’ who croaked that it was crazy if we took such a risk. But that risk, if it existed, we were prepared to take. We have now been open for almost half a year and it’s the accumulated experience, that I would like to present here.
“Not even 1% of our visitors do not have a debit or credit card. They can buy prepaid cards around the corner, from our friends at the Melody restaurant, so they come in anyway.
“Those who whine most loudly will usually be from Germany or Russia. In those countries, you apparently pay a percentage of the sum to buy something in the form of a fee to the card company, so it is understandable. Such aberrations are fortunately, as far as I know, not in our country.
“Many, especially the elderly, are uncertain and unaccustomed to paying by credit card, but it turns out that they almost always have one with them, whether they can remember the PIN code at first or not, so that even they manage to pay by card in the end, even if it is manually.
“Many of our visitors, especially the Swedes actually, commend us on having taken this step, they tell the staff so. They see the benefits of increased personal safety, efficiency, hygiene and the environment. We are just one of many cashless businesses in our country and all the time there are more coming onboard. Why can we not take the plunge and make Sweden the first cashless country on Earth?
“There are those who say that the black economy is the oil in the white government machinery, but I do not think that applies here. We Swedes are quite unique in that we have confidence in our institutions, we have an impartial public service that does not have that type of oil. The corruption in the local government sector, which we occasionally read about, must be hunted down with a blowtorch. The hunt will be more effective if bribes can never consist of cash.
“A widespread misconception is that it costs more to use cards than cash. In fact, it’s the other way around. Those who persist in using coins and banknotes and can be said to be anti-social, for the banks are passing on these costs, which are gigantic, to us in the form of lower deposit rates and higher lending etc. Someone is paying for the management of all this cash production, from chopping down trees and mining ore to distributing the money via armed transportation.
“Money is literally dirty, it teems with bacteria, and Swedish cash is among the worst in Europe. I saw the other day a man who obviously had a bad cold. He sneezed into his hand and then with the same hand picked up a hundred and handed it to the clerk, who had to take the corner of the note, pinching it between her thumb and forefinger.
“A majority of Swedes think that Euro banknotes and coins are the most unhygienic everyday objects. It is time that we get rid of them.”
UPDATE: 30 October 2013
Björn’s article in ‘Dagens industri’ provoked a lot of reaction, much of it negative. Björn answer some of the critics in a follow up piece:
Wow, what strong feelings my article on the removal of cash from society stirred up. Apparently, those paper notes have for many a symbolic value, which is much larger than the denomination written on the banknote itself.
After long and accurately reflecting, I myself have come to the conclusion that cash is probably not something that I personally need to carry and that by not using it, I am not concerned by any implications regarding my privacy and personal freedoms. But this my just my opinion, there are apparently many who do not share it.
“I really don’t know what electronic device may have effects in this area, but it is certainly worth a proper investigation.”
Agnes Wold, professor of Clinical Microbiology at the University of Gothenburg-Sahlgrenska University Hospital (Di 26/10) writes: “Before we get into on the essentials, I would like to clarify that I didn’t find any evidence quoted where it states that cash is unhygienic. Money is not dirty at all.”
But she does not share the view with Ian Thompson, Professor at the University of Oxford (Svenska Dagbladet, 26/3). It was him I referred to in my article. During an investigation, he came to the conclusion that each Krona contained an average of 39,600 bacterium. I have of course no way of knowing who is right, but it is irrelevant, I mentioned it mostly as a curiosity. It has very little relevance in the debate about whether cash should continue or not.
Is the card the rich’s friend and the poor man’s enemy? Is this is a class issue? Many seem to consider it so, and in that case I would like to refer to a meeting of the UN General Assembly in New York on 25 September this year where world leaders from the United States, Europe, Africa and Asia participated. Their conclusion was that greater attention would be placed on utilising digital technology to increase access to financial services as a means of alleviating poverty.
“An innovation, which I believe has the potential to change the lives of the poor as a new vaccine or a new crop, are digital payments,” said Bill Gates, co-founder of the Bill and Melinda Gates Foundation, before a crowded auditorium.
“Digital payments give the poor a foothold (to escape poverty) by freeing them from one of the biggest obstacles to economic security: cash.”
I know it is not directly pertinent in Sweden, but I still think it is relevant to mention that for the individual citizen, it may seem cheaper to use cash because you pay a small fee when you pay with cards. On average, the fee for a debit card is 250 SEK per year, so it is a negligible amount per transaction. But we must not forget the national perspective.
A study by the Swedish payment system implemented in 2010-2011, on behalf of the Riksbank, concluded that the socio-economic costs in 2009 for cash, bank and credit cards was 0.54 per cent of GDP. This was cash for 0.26 percent of costs, credit cards and debit cards for 0.19% 0.09% (Segendorf & J, The cost of consumer payments in Sweden, 2012).
The report shows that cash payments are economically priced and that card payments with debit cards are much cheaper. According to the Swedish Tax Agency, the black market in goods and services costs Swedish society 65 billion a year in reduced tax revenues. Recovering at least some of this money if cash disappeared could be used to legalise activities currently being carried out to the detriment of the tax payer and society. (Niklas Arvidsson, Associate Professor and lecturer in industrial dynamics at KTH, the cashless society – report of a research project, 2013)
If banks want to help ensure that we get a cashless society, they must be much more transparent than today and be seen to provide both large and small commercial entities with the benefits from the savings in the form of lower fees. Trust among the public can never be built unless it ensures that customers receive part of the profits, for example, in the form of higher deposit rates and lower lending rates. One of the strongest arguments against the cashless society is precisely that banks would have too much power. All the power over the money, according to some; the project stands or falls with whether the citizens can be convinced that it is not so.
So, we have arguments about freedom and integrity. Many people have a notion that cash is a final confidential haven. But is it really so? Is it really the small everyday purchases that you did not want to be tracked? They are the only ones that can be considered, as more traders refuse to take cash, and have the right to refuse to accept larger amounts. On Swedish Commercial website you can read that a trader can currently decide a) to not accept cash. b) to reject 1,000 kronor notes and c) can themselves set a maximum amount for cash purchases i.e. 15 000
I have thought long and hard about this and can not come up with anything other than the feeling of freedom, that cash could possibly give, is an illusion, at least for me.
Costs are as we have seen fairly well documented, but it is not the potentially enormous savings in both money and human suffering that can occur regarding the crime. This is more important than anything else, I think, because it affects terribly many people every day. I really do not know what kontantlöshet may have the impact in this area , but it is certainly worth a proper investigation .
I have to ask the question again because I have not got a good answer: What does a thief do with his stolen goods in a cashless society? How would the drug trade on the streets continue? I do not accept the sloppy response of “oh it will do, they will find a way”. We must think it through properly and thoroughly and put ourselves in the thief or drug dealer’s shoes. What do the police say about all this? How do lawyers feel about the debate?
An interesting and stimulating mind game, which readers can engage in at the dinner table is: You are the thief, what do you do with the TV you have just stolen if you can’t get cash for it? Your network of accomplices do not want it and the supermarket refuses to accept it in payment for the milk which you have run out of at home.