The Swedish experiment

[Dave Birch]Within the narrow confines of this blog, Sweden is one of the favourite geographies, partly because it is struggling with cash and partly because it is more transparent than some other banking systems.

The Swedish central bank published some detailed figures on the cost of payments and they provide useful input to the debate on the future of payments. They show that on average the variable cost of an ATM cash withdrawal to the issuing bank is around 1.3 SKr

[From Digital Money Forum: Cost dynamics, again]

Well, that doesn’t sound like very much. But in Sweden, it multiplies up to a big fraction of the economy because the Swedes are heavy ATM users.

Stefan Ingves (the Governor of said Central Bank) said that Sweden has “many more” cash transport robberies than its neighbours because, essentially, cash withdrawals from all ATMs are free (despite the large costs entailed in cash handling). This means, in turn, that Swedes use cash far more than Finns, Danes, Norwegians and (especially) Icelanders.

[From Digital Money Forum: The Cash Menace up North]

Mr. Ingves also notes (in the speech referred to above) that Sweden has far more cash-in-transit robberies than its neighbours and suggests an alignment of the private and social costs: the cost of armed robberies, he said, should be accounted in the cost of cash. This means that far from being free at ATMs, cash in Sweden should be expensive. He is, of course, completely correct.

Defending cash

[Dave Birch] I was listening to a recent episode of Skepticality, about the TV show “Numb3rs”. The presenters were interviewing one of the writers about the making the show and they made a comment that caught my money-obsessed ear. The writers said that they had been researching a show about counterfeiting and during the course of this research they had copied a $20 bill on a photocopier to see how well it came out. Shortly thereafter they got a phone call from the US Treasury! The photocopier was online, and phones home when someone tries to copy money! (Incidentally, the Treasury guys weren’t very happy to hear the proposed plotline about the FBI investigating some counterfeiters because it’s the Secret Service — until 2002 part of the Treasury — who take care of that.) I thought they might be exaggerating, but it turns out that not only do some photocopiers have this feature built in to them, there are many printer drivers that won’t print scanned bills!!. Ever-vigilant for the cause of monetary trivia, I tried it out myself. I scanned a fiver and tried to print it, and I got this error message.

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