In 2018 a former deputy governor of Sweden’s central bank predicted that by 2025 the country would probably be cashless.
Seven years on, that prediction has turned out to be pretty much true. Just one in 10 purchases are made with cash, and card is the most common form of payment, followed by the Swedish mobile payment system Swish, launched by six banks in 2012 and now ubiquitous. Other mobile phone payment services are also growing quickly.
In fact, according to the central bank’s annual payments report, published this month, Sweden and Norway have the lowest amount of cash in circulation, as a percentage of GDP, in the world.
But in the context of today, with war in Europe, unpredictability in the US and the fear of Russian hybrid attacks almost a part of daily life in Sweden, life without cash is not proving the utopia that perhaps it once promised to be.
Such is the perceived severity of the situation that the authorities are trying to encourage citizens to keep and use cash in the name of civil defence. In November, the defence ministry sent every home a brochure entitled If Crisis or War Comes, advising people to use cash regularly and keep a minimum of a week’s supply in various denominations to “strengthen preparedness”.
In its report, the central bank says: “Measures need to be taken to strengthen preparedness and reduce exclusion so that everyone can pay, even in the event of crisis or war.” For years, it says, efficiency has been the priority for payments, but now safety and accessibility “are at least as important”.
In December the government published the findings of an inquiry that proposed that some public and private agents should be required to accept cash – a recommendation that the central bank says the authorities should implement.
In recent years the central bank has been working on its own digital currency, the “e-krona”, as cash declines. But the project ended a couple of years ago, and the bank is now focused on monitoring the global development of digital currencies.
Sweden is not the only Nordic country backpedalling on plans for a cashless society. Last year Norway, which has a popular equivalent to Swish called Vipps MobilePay, brought in legislation that means retailers can be fined or sanctioned if they will not accept cash. The government has also recommended that citizens “keep some cash on hand due to the vulnerabilities of digital payment solutions to cyber-attacks”.
Norway’s former justice and emergencies minister Emilie Mehl put it in clear terms: “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.”
Ultimately, when it comes to emergency planning, the world’s two most cashless societies are still banking on cash.
