Sweden Reconsiders Cashless Future Amid Security Concerns

In recent years, Sweden has emerged as a leader in adopting digital payment methods, with cash transactions plummeting to just one in ten purchases. The country's most popular forms of payment now include credit and debit cards, along with the widely-used mobile payment system Swish, which has gained prominence since its launch by six banks in 2012. However, as global uncertainties arise, including ongoing conflicts in Europe and cybersecurity threats, life without cash is proving to be less than ideal.

Decline of Cash Transactions

According to the latest report from the Swedish central bank, Sweden and Norway possess the lowest cash circulation relative to their GDP in the world. The central bank's annual payments report highlights this downward trend, emphasizing that card payments and digital methods have largely supplanted traditional cash transactions.

While the movement towards cashlessness has been celebrated for its efficiency, recent geopolitical developments have shifted perspectives. The prediction made by a former deputy governor of Sweden’s central bank in 2018 suggested that the country would likely be cashless by 2025. As of now, that forecast stands largely accurate but also raises concerns about the implications of a cash-free society amid rising tensions.

Government's Shift Towards Cash Preparedness

In response to these concerns, Swedish authorities are urging citizens to retain and utilize cash as part of a strategy for civil defense. In November, the Swedish Defense Ministry distributed a brochure to every household titled "If Crisis or War Comes," which advises citizens to regularly use cash and maintain a minimum of a week’s worth of various denominations for emergencies.

The central bank echoed this sentiment in its recent report, emphasizing the need to prioritize safety and accessibility in payment systems alongside efficiency. To counter potential exclusion of individuals unable to use digital payments, the report suggests that measures must be taken to ensure everyone has access to cash, especially during crises.

Furthermore, in December, the government released an inquiry proposing that certain public and private entities be mandated to accept cash. This recommendation has garnered support from the central bank and is expected to be implemented in upcoming legislation.

Regional Developments in the Nordic Countries

Sweden is not alone in re-evaluating its cashless trajectory. Norway, which has its equivalent mobile payment service called Vipps MobilePay, introduced legislation last year that penalizes retailers who refuse to accept cash. The Norwegian government has also advised citizens to keep some cash available due to the vulnerabilities presented by digital platforms and the potential for cyber-attacks.

Emilie Mehl, the former justice and emergencies minister of Norway, articulated the urgency of this matter, stating, "If no one pays with cash and no one accepts cash, cash will no longer be a real emergency solution once the crisis is upon us."

Conclusion

As the world's two most cashless societies grapple with the implications of diminishing cash transactions, both Sweden and Norway are taking steps to safeguard their citizens' ability to access physical currency. This shift represents a significant change in approach, highlighting the growing awareness of the importance of cash in a society where digital payments are becoming increasingly prevalent. The evolving landscape of payment methods continues to be influenced by both technological advancements and global uncertainties.