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Sweden: the Riksbank should Subsidise the Cash Cycle

Categories : Cash is a contingency and fall-back solution, Cash is the first step of financial inclusion
November 12, 2020
Tags : ATM, Cash cycle efficiency, Central Bank, Sweden
Nina Wenning, the CEO of Bankomat, the Swedish bank-owned ATM operator calls for the central bank to incentivise retailers to accept cash by subsidising the cash cycle.
Guillaume Lepecq

Chair, CashEssentials

This post is also available in: Spanish

Cash in Circulation is on the rise

Even though cash in circulation has been on the rise since mid 2017, Sweden is often recognised as being a low-cash society. This is not without problems. According to a survey commissioned by Bankomat, 75% of the population want cash to be available in the future and even if they do not use it daily, they consider it important for the elderly and the vulnerable as well as in crisis situations.

Source: Riksbank, CashEssentials

Bankomat is the leading ATM deployer in Sweden with ATMs and Cash Deposit Machines in over 500 locations. It is jointly owned by the five largest banks: Danske Bank, Handelsbanken, Nordea, SEB and Swedbank. Bankomat is a licensed payment institution supervised the Swedish Financial Supervisory Authority.

ATM withdrawals declined by 18% in 2020

During the first half of 2020, Swedes withdrew a total of SEK 34 billion from ATMs, which represents on average SEK 546 (approx. €54) per month per person. This amounts to an 18% decline in comparison with 2019, when SEK 41 billion were withdrawn or SEK 663 per person.

Both the government and the central bank recognise the need to ensure both access to and acceptance of cash in the future. A new law came into effect on January 1st requiring banks to provide an adequate level of cash services. The law was designed to protect the more fragile people such as the elderly, migrants, those with disabilities, the rural or those who do not have access to digital payments.

In a recent Economic Commentary, the Governor of the Riksbank called for mandatory acceptance of cash. “I believe that stronger legal protection for cash could slow down the decline in its use.” says Ingves. “I would prefer to see self-regulation, but if that is not possible, politicians must legislate and force trade to accept cash,” said Björn Eriksson, spokesman for the pro-cash consumer group Kontantupproret.

Make cash attractive for retailers

Nina Wenning, the CEO of Bankomat objects to forcing retailers to accept cash as this would increase their costs and complexity of doing business, particularly in remote areas where cash resources are inaccessible. Instead, Wenning recommends to make cash more attractive for retailers by lowering the costs. Three concrete proposals have been put forward for the central bank.

First, the Riksbank should subsidise cash-in-transit and cash logistics to reduce the cash-handling costs for retailers.

Second, the Riksbank should offer retailers full compensation for the collection of cash once a week.

Third, the Riksbank should finance the installation of secure cash handling equipment to reduce merchants’ security concerns.

Wenning recommends that these responsibilities be written into the new Riksbank Act.


This post is also available in: Spanish