Can cashless societies ever be truly inclusive? Part 2

In 1993, world renowned Fintech disruptors, the Wu-Tang Clan, famously proclaimed “Cash rules everything around me”, so how is it that 27 years later, no one seems to need it anymore? Well, cash in its physical sense that is. In 2020, the payments landscape is a far cry from what it once was: mobile, contactless and wearable payments have revolutionised the way we pay. Cash has become a relic of the past, a token gesture beating on like boats against the current. Is a cashless society even an option at the rate we are moving? Or an inevitability? While no one can say for sure, there are definitely dangers looming within the latter – change is inevitable, but choice is imperative.

To illustrate this point, and in conjunction with our previous blog post regarding the U.S. cities leading the fight against financial exclusion, we should delve a little deeper into what a ‘cashless society’ actually looks like: its strengths, its flaws and its place in the financial playground of tomorrow. We can do all this by looking at Sweden.

Sweden is an example of where the cashless society utopia went from dream to reality. The country boasts a 100% adult banked population and had cash accounting for 1.1% of its total transaction value in 2018 [1]. Speaking about this, Martin Floden, Deputy Governor of Sweden’s central Riksbank, said that “Sweden is cashless [and] there are no transactions today where we need to use cash” [2]. However, contrary to public belief, this transition was not an engineered directive from leading payments institutions in the country, but rather happened by chance. Sweden has very weak legal tender recognition, despite cash being technically recognised as legal. Additionally, the central bank of Sweden took a neutral stance, in the face of modern payment methods coming to fruition. Finally, Sweden, put simply, finds it difficult to physically move cash around the country. The country’s size and sparse population somewhat hinder the movement of cash, making it logistically difficult and arguably unnecessary in the face of more convenient and accessible payment methods.

So, what’s the point of all this? It could be argued that Sweden is beginning to regret its choice. At the 35th annual European Security Transport Association (ESTA) Conference in May 2019, members of the Swedish parliament’s committee of inquiry [3] addressed the fact that the number of bank branches providing cash services in the country had markedly declined, and as a result, so had the amount of cash withdrawn from ATMs. The country had seen a substantial reduction in cash payments, from 40% in 2010 to 15% in 2016 [4], with 29% of the population stating that they need cash to get by, and 68% wanting to keep cash-based payments as an option for the future. Whether by design, or incidentally, Sweden became cashless, however, contrary to Martin Floden’s claims that the country didn’t need cash, there is clearly still a demand from the Swedish public to have access to it.

Not alarming enough? How about the fact that in May 2019, The Swedish Civil Contingencies Agency, a branch of the Swedish government, warned its citizens to hoard cash in the case of a cyber-crisis. A myriad of emergencies that could potentially blight Sweden’s new infallible system include power cuts, technological glitches, or even cyber-attacks. The result? Swedish people would have no means to pay. What is even potentially more worrying is that current projections indicate that the country will be completely cashless by 2030. With consumer demand for cash, and the pandemic issues that surround it being phased out altogether, can we be sure that true cashless societies are the way forward?

There is a debate to be had about whether society at large deems this to be the right move, but it has to be understood that such measures are often discriminatory, blocking and prohibiting certain members of society from being able to live their lives in a way they recognise. This applies not only to aging groups still to be integrated into the modern payments landscape but also to homeless people, without bank account access. As a step towards a fair and considered form of inclusion, perhaps we should continue to acknowledge cash as still relevant, necessary and a part of many people’s lives, for many years to come.



[1] Patrick Brusnahan, “Is Sweden Still In Love With The Cashless Society?”, Electronic Payments International, June 2019.

[2] Patrick Brusnahan, “Is Sweden Still In Love With The Cashless Society?”, Electronic Payments International, June 2019.

[3] “ESTA 2019: Sweden sees less cash, more problems”, Banking Automation Bulletin, August 2019. 

[4] “ESTA 2019: Sweden sees less cash, more problems”, Banking Automation Bulletin, August 2019.