Stockholm homeless accept credit cards as cash king no more

A stable financial system and a tech-savvy population mean Swedes are increasingly favouring device-based payment over hard currency

Stockholm's homeless magazine vendors no longer need to ask if you can spare any krona. They take cards.

In the most cashless society on the planet, the sellers of Situation Stockholm, a culture magazine sold by homeless people, were last month equipped with card readers to accept donations from fellow Swedes. The move marks a world first, according to their employer.

“More and more of our sellers come in and say that people don't have cash — they have told us this for a long time,” Pia Stolt, the magazine's chief executive officer, said in a telephone interview. “This becomes frustrating, but now they feel they offer an opportunity to buy the paper.”

A stable financial system and a tech-savvy population have encouraged Swedes to favor devices over cash in a country that printed Europe's first banknotes in 1661. Bills and coins represented just 2.7 percent of the Swedish economy in 2012, compared with an average of 9.8 percent in the euro area and 7.2 percent in the U.S., according to the Bank for International Settlements. Many Swedes think that figure is still too high.

“We could and should be the first cashless society in the world,” Bjoern Ulvaeus, a former member of Abba, says on the website of a Stockholm museum dedicated to the Swedish band.

Situation Stockholm, which costs 50 kronor ($8) and whose cover stories have featured Swedish celebrities such as pop star Robyn and actress Noomi Rapace, already can be bought via a text-message service. By using card readers supplied by Swedish mobile-payments company iZettle, the magazine is seeking to accelerate sales growth.

“This will make it easier to sell the paper and I also think this changes a little the image that people have of our sellers,” who get to keep 50 percent of the money they take from selling the magazine, Stolt said. The response from both customers and vendors has been “very positive,” she said.

Five of Situation Stockholm's 350 vendors are using the new equipment and the publication plans to introduce the devices on a broader scale after its initial trial led to increased sales.

“Before, everyone said they don't have cash, or that they cannot pay with their mobile phones because it was a corporate phone. But now they can't get away,” magazine vendor Stefan Wikberg said with a smile as he stood outside the underground entrance at Stockholm's central station. “I take cards, SMS payments, cash and they can also pay in dollars and euros.”

Wikberg, who has worked for Situation Stockholm since 1999, forecasts that sales of the magazine could jump 20 percent as the card-payment program is rolled out further.

Some Swedish retailers have already made cash a thing of the past, including bedding seller Kungsaengen, mobile phone chain 3 and phone company TeliaSonera.

Cards are also the only form of payment at Abba The Museum, where Ulvaeus is a co-investor. Less than 1 percent of visitors at the tourist destination don't have a form of plastic money when they arrive at the entrance, the composer wrote in an Oct. 22 opinion piece in Dagens Industri newspaper.

Ulvaeus — whose hits with Abba included the song “Money, Money, Money” — lived for a year without coins and notes and said the only inconvenience he found “was that you need a coin to borrow a trolley at the supermarket.”

While it is common even for big international retailers such as Ikea and Metro's Saturn not to accept Mastercard or Visa in Germany, cash is used in only 30 percent of Sweden's shop transactions, according to the Swedish Trade Federation.

SEB, Swedbank and Nordea Bank, three of Sweden's four largest banks, have all stopped manual cash-handling services in 65 percent to 75 percent of their local branches as Swedes instead rely on credit cards, the Internet and mobile phones to make their payments. Only Svenska Handelsbanken still has cash handling in all its Swedish branches.

“Changing customer behavior has resulted in a long-term trend with less cash usage and more card usage,” Swedbank said in an Oct. 22 earnings report. On a rolling 12-month basis, the number of ATM transactions decreased by 11 percent and the total value of withdrawals fell by 7 percent, according to the bank. The number of card purchases in stores rose by 11 percent.

The popularity of paying by card in Sweden reflects both a love of technology among the country's consumers and trust in the financial system, according to Bengt Nilervall, head of payments at the Swedish Trade Federation.

Situation Stockholm was initially concerned that Swedes would be hesitant to use a card on the street.

“This was one of the things we were wondering about — how safe people would feel with iZettle and this box — but they do,” CEO Stolt said. “Now we will reach people who actually never carry cash.”

Copyright Washington Post/Bloomberg News 2013

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