Internet startups in Sweden and elsewhere are now hard at work developing payment and banking services for smartphones.
Swedish company iZettel has developed a device for small traders, similar to Square in the U.S., that plugs into the back of an iPhone to make it work like a credit card terminal. Sweden's biggest banks are expected to launch a joint service later this year that allows customers to transfer money between each other's accounts in real-time with their cell phones.
Most experts don't expect cash to disappear anytime soon, but that its proportion of the economy will continue to decline as such payment options become available. Before retiring as deputy governor of Sweden's central bank, Lars Nyberg said last year that cash will survive "like the crocodile, even though it may be forced to see its habitat gradually cut back."
Andrea Wramfelt, whose bowling alley in the southern city of Landskrona stopped accepting cash in 2010, makes a bolder prediction: She believes coins and notes will cease to exist in Sweden within 20 years.
"Personally I think this is what people should expect in the future," she says.
But there are pockets of resistance. Hanna Celik, whose family owns a newspaper kiosk in a Stockholm shopping mall, says the digital economy is all about banks seeking bigger earnings.
Celik says he gets charged about 5 Swedish kronor ($0.80) for every credit card transaction, and a law passed by the Swedish Parliament prevents him from passing on that charge to consumers.
"That stinks," he says. "For them (the banks), this is a very good way to earn a lot of money, that's what it's all about. They make huge profits."
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.