Sweden Is The World's First Cashless Country, Is Australia Next?

Australia could be cashless country in just three years, and now we have a model example in Sweden, which will soon be the world's first cashless society.

Australia is already seeing a decline in cash payments, but there are numerous concerns that need to be addressed before we trash cash.

'Tap-and-go' technology has changed the way Australians make payments; however, Sweden is taking this to the extreme with plans to cut out cash all together.

A Swedish bank study found just 13 per cent of payments in the country are made using cash, edging the Scandinavian nation closer to its goal of becoming the world’s first cashless society by 2023.

Cash payments rare in Sweden and most people pay using debit card. Photo: CBS

Instead most Swedes opt for debit card payments, preferring to use a pin to uphold their trust in these technologies.

A finance app called “Swish” is also a key player in Sweden, but the Reserve Bank of Australia found mobile apps make up a small percentage of the nation’s payments.

Despite this, the study also found a definite decline in cash payments in Australia. Professor Richard Holden, an economist at the University of NSW, said in 2018 that Australia could become cashless by 2020, through a series of changes including retiring the $100 bill by the end of 2018 (which didn't happen), and the $50 bill by the end of 2019 (which isn't on the horizon).

Holden called such a move "the logical extension of an economy that already relies heavily on electronic payments", but it's still some way off in Australia.

As it stands, the Reserve Bank reported 37 per cent of payments in Australia in 2016 were made using cash -- so we still have a bit of distance to travel before ditching notes and coins entirely.

Cash payments are declining in Australia. Photo: CBS

Cash is more commonly used for smaller payments by all age groups, especially for those under $10.

However, it’s younger Aussies who are opting for different payment methods, including phone apps.

It’s not a new concept here, with some retail spots already going cashless  -- including the Spice Alley dining precinct in Sydney, which accepts card only, saying it is to improve service speed, hygiene and safety.

READ MORE: People Are More Likely To Return A Wallet With Cash In It: Study

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Despite society moving away from cash and toward, there could potentially be downsides to a cashless community.

Phone apps are a popular payment method in Sweden. Photo: CBS

Small businesses may face an increase in transaction fees with more people using cards or even payment apps.

The elderly and those who struggle with technology are at risk of being left behind. As are people who can’t afford smart phones or those who don’t have credit or debit cards.

Still, all statistics point to Aussies ditching their physical dollars but they won’t be disappearing permanently…yet.