As more economies are formulating strategies to move towards a cash-lite or cashless society, authorities in Sweden are starting to get worried about the speed at 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.
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.