In a few year’s time, travellers won’t need to worry about visiting a foreign exchange bureau to change cash when travelling to certain cities and countries.
Sweden is leading the world in the move towards a cashless society and experts anticipate that the transition will be completed by 2023. Already the number of cash transactions in the Scandanavian country have dropped to 7% of the total spend, according to Jonas Hedman, associate professor at the department of digitalization at the Copenhagen Business School.
Swedes use popular payment apps frequently and in future all transactions will be some form of digital transfer—cheque, credit or debit cards, RFID signals or direct transfers via smartphones.
Unlike in most countries (like South Africa, the United States and Denmark) where cash is legal tender and by law must be accepted as payment, contract law supersedes payment law even though cash is also legal tender in Sweden.
This means that if a shop displays a sign that it doesn’t accept cash, ‘then you, as a customer, have entered a contract or an agreement with that store that they don’t accept cash,’ says Hedman.
The cash in circulation in Sweden has decreased by about 50% over the past decade.
‘When we look at cash in circulation compared to gross national product, we are below 1% in Sweden.’
‘In the U.S., it’s around 5% to 7%. In the U.K., it’s around 3%. Countries in South America have around 30%’, said Hedman.
In March 2018, of South Africa’s R4.3-trillion GDP, 1.7-trillion was cash in circulation, which is closer to 40%, according to South African Market Insights.
Sweden is not the only place where cash is being used increasingly infrequently, chat and payment app ‘WeChat’ is used widely in big cities in China and according to Smarter Traveler, other cities in the world that are largely cashless include Seoul in South Korea, Singapore, and Reykjavik in Iceland.
Image: Blake Wisz
