Sweden Looks at a Mobile Payments Only Society, and Reconsiders

June 13, 2018         By: Steven Anderson

We love mobile payments out here, and with good reason. But even we understand that cash is the original mobile payments system, invented so people wouldn’t have to carry pounds of metal everywhere they went. So a system that eschews cash at all costs isn’t exactly the best system around. Variety is the spice of life, and versatility key to the best customer experience. Perhaps understanding that at last, Sweden—which was well on the way to a cashless society—seems to be taking another look, and not exactly liking what it sees.

The reports suggest that a group of Swedish lawmakers is looking into new laws that require banks to handle cash in the country. The Riksbank committee, currently reviewing central banking law, is poised to not only force banks to offer cash withdrawals, but also accept receipts for same. The proposal  requires any bank that handles over 70 billion kronor—about $8 billion US—in deposits to actually offer a cash option.

The Riksbank committee is committed to the notion that 99 percent of Swedes should have access to cash within 16 miles of their homes. All of Sweden, the committee notes, should have “…reasonable access to those services…”, though just how “reasonable access” is accomplished is left largely up to the banks. This can include cash machines, third-party operations, or live teller help.

There are certain dangers to a cashless society. If cash is accepted alongside mobile payments, it’s a comparatively minor problem; just keep a certain amount of cash on hand and never touch it until it’s needed. Then when it is, switch to it. A purely cashless society, however, loses that backup when the system goes down.

All systems go down. It’s inevitable. The gold standard for any system is what’s known as five-nines availability, or a system with 99.999 percent uptime. Hoping for a system that always runs, or where downtime can be scheduled into irrelevance—if no one uses a system at 3:00 AM, who cares if it’s down then—is a bridge too far.

So reasonable people, therefore, include backups. Cash is the greatest backup a cashless society can have, and that the Swedish government is taking formal notice of this should prove a welcome development for Swedes, especially when mobile payments systems go down.