Sweden reverses its attempt to become a cashless country

It is impossible to pay by cash in most cafes in central Stockholm. “Contentfrit”, refers to ATMs at some businesses that only accept mobile phone or card payments.

Conversely, in a highly digitalized society, this should not be a problem. The use of technology symbolizes the practicality and efficiency that define the values ​​of the Swedish population. However, something has started to change. The government is preparing a bill to maintain cash in basic services and is considering increasing pressure on banks to ensure that individuals and companies can continue to deposit and withdraw cash from branches and ATMs. The law, which will be sent to parliament in December, has the support of a broad political spectrum, from the most conservative to the most progressive parties.

“He cashless has become a problem,” admits Christina Wejsmar, head of the payments department at the Bank of Sweden (Riksbank). Max Brimberg, a researcher at the organization, says, “We have gone too far in our quest to become a completely cashless country .” This organization was the first in Europe to issue paper banknotes (in 1661). It is not long before Cecilia Skingsley, deputy governor of the Riksbank, announced in 2018 that Sweden would soon be fully formed. cashless (Without cash). But the world has changed. Especially after Russia’s war against Ukraine. The conflict has alarmed the country, which joined NATO this year following in the footsteps of Finland last year. “Although it is very unlikely, we will not deny that we fear suffering a Russian cyberattack that would put the entire payments system at risk,” Wejsmar admitted. In fact, the government has launched a scheme that recommends that citizens have a survival kit at home, which should include, among other elements, a wad of cash for the value of each household’s weekly expenses.

Only 19% of payments in the Nordic countries are in cash, compared to 59% in the euro zone.

Furthermore, the Bank of Sweden and the government have now begun to recognize that the digitalization of payments is excluding the 10% of the population – 1 in 10 million – who cannot (or do not want to) use technology. ). They mean the elderly, people with disabilities and the population living in rural areas of a very large country. “Nobody thought anything could go wrong when an explicit commitment to digitalize payments was made in 2010. a society cashless “It was a symbol of modernity, practicality and the fight against robberies and tax fraud,” says Brimberg.

According to the Riksbank survey, cash use has fallen from 40 to 19% between 2016 and 2022, while in the average euro zone country the decline has been equally significant, but starting from much higher, from 79 to 19%. , according to ECB data. The most common payments are by credit and debit cards, although mobile payments and Swish systems (equivalent to Bizum) are also on the rise.

On behalf of the Swedish Consumer Organization, the person in charge, Johanna Hallen, deplores that “We are not only concerned about the elderly being left behind, we are also concerned about privacy rights, cyber attacks and telephone or digital scams. A cash-free society does not mean it is crime-free,” he says.

Exclusion of 10% of society, especially the elderly, also inspires new rules

According to this unit, the government’s bill is inadequate. It is not enough to guarantee that cash is maintained in most basic product stores – supermarkets, pharmacies, gas stations, services and public transport – but the law must be extended to all businesses. “Aren’t buying clothes or drinking coffee basic activities to live a normal life? It’s not enough to be able to buy sausages in the supermarket,” laments Björn Eikson, president of Kontantuprorate, the cash defense unit.

As the government proposal is drafted, Swedish legislation is not the most ambitious compared to its neighbours. Norway recently approved a regulation that obliges all businesses to accept cash while Denmark obliges shops to accept cash. cash During daytime hours. Finland is preparing its version.

“If Sweden were within the euro, everything would be easier and the debate would not be so heated. The euro is an even stronger currency than the crown,” admits Liberal Party MP Malin Danielsson, who is confident that the government’s proposal (in which he is part along with two other right-wing parties) will go ahead because it also has the support of progressives and the far right. Is received.

Scams, secrecy and dependence on private sector worry society

Beyond the possibility of paying in cash, the Swedish Consumer Organization is concerned about the declining capacity of the infrastructure. A total of 1,500 offices operate in the country and the number of branches where money is withdrawn or deposited has dropped to just over a hundred (see graph). “It is expensive for banks to maintain infrastructure as cash use is falling,” Brimberg admits. Furthermore, the Contemporaneous Association says that the growth in digital payments increases the dependence on North American or Asian groups that own the technology (Visa, Apple Pay, Samsung, Mastercard…). “On the other hand, cash is money that is issued by the Bank of Sweden and does not depend on private banks in the country,” says Ericsson.

In any case, those responsible at the Riksbank are confident that Sweden will not experience great returns on cash. “We are a digitalized country and technology, even if it comes from others, has allowed us to progress for decades. For most citizens, digital payments are positive. Only now do we deem it necessary that cash Stick to basic services to protect us from threats and leave no one behind,” Wejsmar concluded.