Too Much Cashless Now Concerns Swedish Authorities

Authorities in Sweden are starting to get worried about the speed in which cash is going away as a preferred payment method.

According to a report in Bloomberg citing government officials, the Central Bank is starting a review of the current legislation and the speed in which cash is disappearing. “If this development with cash disappearing happens too fast, it can be difficult to maintain the infrastructure” for handling cash, said Mats Dillen, head of the parliamentary review, in an interview with Bloomberg Monday (Feb. 19). He did not disclose what specific information will be included in the report.

Currently, Sweden is the country with the largest cashless society and is leading in digital payments. Many of its stores and attractions have stopped dealing with cash altogether, in favor of credit cards and mobile payments. While that makes commerce more convenient for younger, tech-savvier consumers, it may leave the elderly feeling cut off in a digital society.

“One may get into a negative spiral, which can threaten the cash infrastructure,” Dillen told Bloomberg. “It’s those types of issues we are looking more closely at.”

According to a 2017 Bloomberg report, the amount of cash that was in circulation in the country hit its lowest level since 1990. What’s more, Sweden’s current amount of circulated cash is 40 percent lower than 2007 levels. Bloomberg noted the declines in both 2016 and 2017 were the steepest ever in the country.

A survey conducted by Insight Intelligence found that in 2017, about 25 percent of Swedes paid with cash one time or more each week, a 63 percent decline from 2013. Of the survey respondents, 36 percent said they never use cash or only use it once or twice a year at the most.

The fast speed in which Swedes are moving to cash is prompting the central bank to evaluate whether the country needs a digital currency. A proposal on that front is expected to come later in 2018, noted the report.


Featured PYMNTS Study: 

With eyes on lowering costs to improving cash flow, 85 percent of U.S. firms plan to make real-time payments integral to their operations within three years. However, some firms still feel technical barriers stand in the way. In the January 2020 Making Real-Time Payments A Reality Study, PYMNTS surveyed more than 500 financial executives to examine what it will take to channel RTP interest into real-world adoption. Here’s what we learned.