Report: Sweden Cashless By 2023

October 13, 2017         By: Steven Anderson

We’ve seen plenty of reports of late of countries moving toward cashlessness, with Canada being one of the latest to go half-cashless, along with China and possibly India. A new report from KTH’s Niklas Arvidsson and the Copenhagen School of Economics’ Jonas Hedman, meanwhile, says that Sweden may be only a few years away from completely cashless operations.

The duo suggests that Sweden could be a cashless society by as early as 2023. The report notes that Swedes have been increasingly eschewing cash, on a strictly voluntary basis, and that’s prompted retailers to make a switch accordingly to keep up with the needs and desires of customers. Thus, most if not all retailers will be taking mobile payments instead, and largely refusing cash, by the 2023 measure.

Interestingly, despite the loss of cash as an option, mobile payments systems won’t be the leader here. In fact, so far, mobile payment applications account for just 0.4 percent of purchases. It’s credit and debit cards that lead the way in Sweden. Though the shift is mainly consumer-led, banks and retailers have both added gentle nudging, interested in making sure that customers aren’t robbed.

No one—not even Arvidsson and Hedman—is particularly sure why mobile payments haven’t caught on. Security doesn’t seem to be the issue, as Arvidsson noted that most Swedes are comfortable enough with digital payments.

Arvidsson noted that Sweden is “…a small country that has had a very stable democracy for a long time,” and thus didn’t have a problem with currency that was strictly on an internet operation as the Swedes trusted said currency.

While there are potential risks to a cashless society—just ask the Indians who lost jobs after demonetization or the folks in Puerto Rico whose post-hurricane supermarkets are suddenly “cash only” affairs—there’s some value here as well. That cash-only supermarket in Puerto Rico is likely sweating some mugging attempts to come. A cashless society is all fine and well, as long as two conditions are met.

  1. It’s all voluntary.
  2. Nothing goes wrong, ever.

The first major blackout will show that cash will always have some value. Mobile payments are wonders of convenience, incorporating loyalty programs, easy-reference receipts and more, but cash is the ultimate backup plan. Sometimes, that backup is a good idea.