Sweden’s central bank governor has called for public control over its payment system. Others say a fully digital system is vulnerable to fraud and attack
It is hard to argue that you cannot trust the government when the government isn’t really all that bad. This is the problem facing the small but growing number of Swedes anxious about their country’s rush to embrace a cash-free society.
Most consumers already say they manage without cash altogether, while shops and cafes increasingly refuse to accept notes and coins because of the costs and risk involved. Until recently, however, it has been hard for critics to find a hearing.
“The Swedish government is a rather nice one, we have been lucky enough to have mostly nice ones for the past 100 years,” says Christian Engström, a former MEP for the Pirate Party and an early opponent of the cashless economy.
“In other countries there is much more awareness that you cannot trust the government all the time. In Sweden it is hard to get people mobilised.”
There are signs this might be changing. In February, the head of Sweden’s central bank warned that Sweden could soon face a situation where all payments were controlled by private sector banks.
The Riksbank governor, Stefan Ingves, called for new legislation to secure public control over the payments system, arguing that being able to make and receive payments is a “collective good” like defence, the courts, or public statistics.
“Most citizens would feel uncomfortable to surrender these social functions to private companies,” he said.
“It should be obvious that Sweden’s preparedness would be weakened if, in a serious crisis or war, we had not decided in advance how households and companies would pay for fuel, supplies and other necessities.”
The central bank governor’s remarks are helping to bring other concerns about a cash-free society into the mainstream, says Björn Eriksson, 72, a former national police commissioner and the leader of a group called the Cash Rebellion, or Kontantupproret.
Until now, Kontantupproret has been dismissed as the voice of the elderly and the technologically backward, Eriksson says.
“When you have a fully digital system you have no weapon to defend yourself if someone turns it off,” he says.
“If Putin invades Gotland [Sweden’s largest island] it will be enough for him to turn off the payments system. No other country would even think about taking these sorts of risks, they would demand some sort of analogue system.”
In this sense, Sweden is far from its famous concept of lagom – “just the right amount” – but instead is “100% extreme”, Eriksson says, by investing so much faith in the banks. “This is a political question. We are leaving these decisions to four major banks who form a monopoly in Sweden.”
No system based on technology is invulnerable to glitches and fraud, says Mattias Skarec, 29, a digital security consultant. Yet Sweden is divided into two camps: the first says “we love the new technology”, while the other just can’t be bothered, Skarec says. “We are naive to think we can abandon cash completely and rely on technology instead.”
Skarec points to problems with card payments experienced by two Swedish banks just during the past year, and by Bank ID, the digital authorisation system that allows people to identify themselves for payment purposes using their phones.
Fraudsters have already learned to exploit the system’s idiosyncrasies to trick people out of large sums of money, even their pensions.
The best case scenario is that we are not as secure as we think, Skarec says – the worst is that IT infrastructure is systemically vulnerable.