these transactions were made electronically. sveriges riksbank. happening at different places in the world, although a breakthrough on a broad front is still in the future ”. this summary can probably said to still hold today. 6 but not all development is tied to e - money. mobile phones are now also used to make payments. for example, we can pay our bus and underground journeys by sending a text message. a few seconds later we receive a text message back from the operator, confirming that a ticket has been purchased and that it can be shown to the driver or conductor. if one has a prepaid card the cost is drawn directly, otherwise it will be put on the telephone bill. there are shops that have begun to use smart cards. at a coffee shop chain in stockholm one can buy a plastic card for sek 20 and then charge it with cash in any of the chain ’ s shops. if one uses the card one receives a discount when buying coffee and sandwiches. there is also a discount on buns and other items. it is evidently rational management at the sales outlets and, moreover, is appreciated by the consumers. we stockholmers can also take pleasure in the congestion charges, where the fee is automatically drawn from our bank accounts when our cars are automatically registered when passing the control points. there are many technical innovations, even with respect to account - based payments. and how about the future …? an important task for us who work at the riksbank is to assess how the swedish economy will develop in the future. the art of making accurate forecasts fills us with respect. i shall therefore refrain from all categoric statements about what will happen with payments. developments are steered by technology and i am no engineer. however, allow me to make a few reflections and guesses. • i believe the “ cashless society ” is as far away as the “ paperless society ” was when one once began to speak of it. there will always be a need for banknotes and coins, although cash transactions continue to decline as a share of gdp. cash is an efficient form of legal tender for certain purposes and will continue to be so. • the next generation will use cards to a far greater extent than we do at present, even for smaller transactions. there are banks today which will, with the permission of the parents, issue simple debit cards to children who are 13 - years - old and above. in addition, payments via text messaging will grow in importance

who have seen them in reality are becoming fewer. i shall never forget when i worked at a sawmill in angermanland and “ the chief clerk ” from the office came down with the pay packets on fridays. when one received the pay packet in one ’ s hand it felt as though one had truly accomplished something during the week. today we all have our salaries deposited in our bank accounts, directly transferred from the employer ’ s account. this is, of course, far more efficient. at the sawmill the “ chief clerk ” went to the bank in harnosand in order to collect the money and then to count it out at the office before he could walk down to us and distribute the pay packets. it took all day for him. but i cannot deny that there was a different feeling to opening the pay packet than to opening a bank statement. the increased use of bank accounts came to revolutionise payments in sweden. with the bank accounts as a base, a number of new instruments of payment developed. cheques were based on bank accounts as were the post and bank giro transfer systems. the same is true of today ’ s card payments and online payments. so what are the present payment trends? and what do we believe will happen in the future? are we, as some have claimed and others have advocated, moving towards a cashless society? just under a year ago the headline on the front page of the economist was “ the end of the cash era ”. 1 is this scenario reasonable? i shall begin by looking more closely at what has happened in recent decades in order to reach some kind of answer to these questions, or at least a qualified guess. cash payments have declined in significance i will begin with cash. cash payments still account for a large proportion of the number of transactions in the swedish economy. but it comes as no surprise to anyone if i say that they have declined in significance in recent decades. as a per cent of gdp, the share of swedish banknotes and coins in circulation ( m0 ) has more than halved since the 1950s, from around 10 per cent to just around 3. 5 per cent. 2 in the past fifteen years, however, the trend has levelled off. the use of cash has not declined in the same way as before. m0 in nominal terms has actually increased. if we look at the statistics for atm withdrawals, we find that the total transaction value has remained fairly constant at around sek 275 billion a year during the