Who needs cash? Not Scandinavia

While a ‘cashless society’ is often brought up in thinkpieces and discussions worldwide, there is only one region taking the initiative.

Who needs cash? Not Scandinavia

The cashless revolution is truly underway in Scandinavia. In Norway, reports say that only 6% of the population are still using cash.

According to Sweden’s central bank, the Riksbank, cash transactions made up barely 2% of all payments made in Sweden in 2015, a figure which has been predicted to drop to 0.5% by 2020.

Over the past 10 years, Danish banks have closed down every fifth cash machine and every second bank branch in the country.


Minimising cash
Banks in Norway are slowly adapting their branches into cashless locations. In 2014, 64 branches of DNB were made cashless. Similarly, Nordea stopped handling cash at all its branches in October 2015. This initiative is anticipated to accelerate the shift towards electronic payments.

In January 2016, Swedish banks expanded Swish, a mobile app for online transactions. While previously used for P2P and in-store payments, it has grown in popularity with 4.4 million users in Sweden as of June 2016.

In December 2015, $688.4m worth of transactions went through Swish, increasing to $892.3m in May 2016.

In addition, MasterCard launched its MasterPass digital wallet in association with Nordea, SEB and Swedbank in December 2015. ICA Banken and Resurs Bank also joined in early 2016. MasterPass users can shop online without having to enter payment and shipping information with every purchase.

Government policies, as well as a rising consumer preference, are aiding the push towards a cashless society. The Danish government proposed a plan in May 2015 that would allow certain retailers to refuse cash payments; it is expected to be implemented in 2016. Moreover, the government has set a deadline to make Denmark completely cashless by 2030.

This seems to be working, as cash payments are declining in Denmark. Cash transactions accounted for 35.7% of total payments in 2011 and this decreased to 28.1% in 2015. In comparison, in other developed European markets, cash took 44.1% of the overall volume.

The Swedish government is equally focused on bringing about a cashless society, a policy supported by retailers’ reluctance to accept cash.

Examples include retailer Kungsaengen and mobile phone retailer 3, neither of which accept cash. The payment cards market grew at a compound annual growth rate (CAGR) of 8.58% between 2011 and 2015.