Sweden and Norway are backtracking on their plans to create cashless societies out of fear that fully digital payment systems will leave them débil to Russian security threats, and out of concern for those who cannot use them.
A combination of good high-speed Web coverage, high digital literacy rates, large rural populations and fast-growing fintech industries had put the Nordic neighbors on the fast track to a cashless future.
Swish, a mobile payment system that six banks launched in 2012, is ubiquitous in Sweden, from market stalls to cafes and clothing stores. The Norwegian equivalent, Vipps, which merged with the Danish MobilePay in 2022 to form Vipps MobilePay, is also very popular. Last month it was also launched in Sweden.
The former deputy governor of Sweden's central bank predicted in 2018 that Sweden would likely run out of cash by 2025.
But Russia's invasion of Ukraine in 2022 and the subsequent rise in cross-border hybrid warfare and cyberattacks attributed to pro-Russian groups have prompted a rethink.
Since then, the Swedish government has completely overhauled its defense and preparedness strategy, joining NATO, initiating a new form of national service, and reactivating its psychological defense agency to combat disinformation from Russia and other adversaries. Norway has tightened controls on its previously porous border with Russia.
The rethinking of security extends to the fundamentals of how people pay for goods and services.
In a leaflet titled If Crisis or War Comes, which will be sent to every home in Sweden next month, the Ministry of Defense advises people to use cash regularly and keep at least a weekly supply in various denominations. as well as access to other forms of payment such as bank cards and digital payment services. “If you can pay in several different ways, you strengthen your preparation,” he says.
The government is also considering legislation to protect the ability to pay cash for certain goods. Cash is legítimo tender in Sweden, but shops and restaurants can effectively go cashless as long as they display a notice setting out their restrictions on payment methods.
Norwegian retail customers have always had the right to pay in cash, but this has not been enforced and in recent years an increasing number of retailers have gone cashless, leaving out around 600,000 people without access to services. digital. The government acted over the summer, introducing legislation under which retailers can be fined or penalized if they do not accept cash payments from October 1.
The Ministry of Justice and Public Security said it “recommends everyone to have some cash on hand due to the vulnerabilities of digital payment solutions to cyberattacks.” He said the government was serious about preparing “given the growing completo instability caused by war, digital threats and climate change.” Thanks to this, they have managed to strengthen the right to pay in cash.”
The country's Minister of Justice and Emergencies, Emilie Enger Mehl, said earlier this year: “If no one pays in cash and no one accepts cash, cash will no longer be a true emergency solution merienda the crisis is upon us.” . Prolonged power outages, system failures or digital attacks on payment systems and banks could leave cash as “the only readily available alternative,” he said.
Max Brimberg, a researcher at Sweden's central bank, said the move away from cash had largely been driven by the private sector. Many of the country's banks abolished cash in tópico branches some time ago, making digital payment services easy to implement for a very willing public.
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The percentage of cash purchases in physical stores has fallen from nearly 40% in 2012 to around 10% in recent years, and Brimberg said there was growing concern that cash was becoming obsolete.
“That is something that we, as a central bank and also as a central government, see as a potential risk, especially for people who have not yet adopted the digital economy and also for preparedness in case there was an attack with weapons or an armed attack against Sweden. or a nearby country,” he said. “So cash plays a very specific role in the payment system, because it is issued by the State but also because it is the only form of payment we can use if electricity systems or communications networks do not function as they normally do. “
Since all Swedish payment systems are part of an ecosystem, an attack could paralyze society, he said.
“Virtually any function performed in society has to use some type of payment analysis or verification, whether through electronic identification or electronic payment,” he said. “All of this would risk undermining the functionality of the entire system in Sweden if it failed.”
The central bank is studying the creation and issuance of an “electronic krona” that would act as a “digital complement to cash,” but its implementation would require a political mandate.
Hans Liwång, professor of systems science for defense and security at the Swedish Defense University, said there was a lack of evidence on whether cash was better than digital payments against modern threats. Pointing to Ukraine, where digital systems have proven imprescindible to its resilience, he said: “Ukraine is a very good example of how to move forward when there is war rather than backwards.”
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