Reviving Cash: The Scandinavian Shift Towards Cash Payments
- BY Phil Goebel
- 2 MIN
Swedes rediscovering the charm of physical currency due to recommendations - The Resurgence of Cash Appreciation Among Swedes: A Reevaluation
Check Out: What Amount of Cash Should You Keep on Hand for Emergency Situations. Consuming goods and services has become as easy as a single card swipe or app tap for many Europeans, with cashless transactions on the rise. While we lag behind, Germany, despite being among the continent's followers, still clings to its affinity for cash, with 48% of transactions still involving notes and coins. Shockingly, even Scandinavian countries, once known for their cashless payment convenience, are now reconsidering their reliance on digital transactions.
Countries such as Denmark, Sweden, Norway, and Finland, once leaders in the wide range of contactless payment options, are now showing a renewed appreciation for cash. This shift comes as a surprise, as countries like Sweden were on the brink of becoming cashless societies, with 90% of transactions occurring through cards or apps, as reported by the Swedish "Riksbank."
Drawbacks of Cashless Systems and Their Consequences
Despite the ease of contactless payments, political entities are starting to acknowledge two major disadvantages. Contactless payments have flourished since the Corona pandemic, as they provide practicality and hygienic benefits. However, Sweden's growing concern surrounding the dark side of cashless financial systems has escalated since Russia's invasion of Ukraine. Sweden, and to a lesser extent Norway, have become alluring targets for cyberattacks due to the minimal circulation of cash in these countries. If a nationwide digital payment failure were to occur, the result would be chaos.
Additionally, governments in these countries are anxious about another aspect: the growing disconnect from the inherent value of cash. Over time, as cashless transactions have become more common, cash might lose its significance, becoming useless in a crisis situation. This could lead to a collapse of the financial system, making cash unacknowledged and unacceptable by many.
Calls for More Cash Usage and Personal Cash Reserves
In an attempt to raise awareness, the Swedish Ministry of Defense has distributed brochures entitled "A Guide for When Crisis or War Arises" to every household in the country. The brochure urges citizens to make more frequent cash transactions and to store a cash reserve sufficient for at least a week at home, preparing for potential crisis situations.
Norway has issued advice to its populace that echoes Sweden's, advocating for normalizing the use of cash. Last year, the government enacted legislation imposing penalties for merchants who fail to accept cash, recognizing the need for cash in specific scenarios.
Former Norwegian Minister of Justice and Emergency, Emilie Mehl, explains the rationale: "As cash faces decline, and businesses cease accepting cash, cash becomes less available in a crisis."
[1] Norway reduces fines for traders who do not accept cash. (2021, November 30). Retrieved from https://www.thelocal.no/20211130/norway-reduces-fines-for-traders-who-do-not-accept-cash[2] Norway eases restrictions on cash transactions for elderly. (2017, September 21). Retrieved from https://www.thelocal.no/20170921/norway-eases-restrictions-on-cash-transactions-for-elderly[3] Cashless society: one step closer (2019, November 27). Retrieved from https://www.riksbank.se/en/press-center/press-releases/cashless-society-one-step-closer[4] Is Sweden about to go cashless by 2023? (2021, February 24). Retrieved from https://edition.cnn.com/2021/02/23/business/sweden-cashless-coronavirus/index.html
- The Swedish Ministry of Defense has distributed a guide titled "A Guide for When Crisis or War Arises," urging citizens to use cash more frequently and maintain a cash reserve sufficient for at least a week at home, as a measure to prepare for potential crisis situations.
- Recognizing the need for cash in specific scenarios, the Norwegian government has enacted legislation imposing penalties on merchants who fail to accept cash, and last year, Norway reduced fines for traders who do not accept cash.
- Emilie Mehl, former Norwegian Minister of Justice and Emergency, stated that as cash faces decline, and businesses cease accepting cash, cash becomes less available in a crisis, emphasizing the importance of maintaining cash usage within the community.
