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Sweden’s shift to cashless raises multiple challenges

Categories : Cash is a contingency and fall-back solution, Cash is trust
August 10, 2017
Tags : Central Bank, Mobile Payments, Public good, Sweden
Sweden might be considered the pioneer in the shift towards digital payments, but even the central bank warns against a hastened transition.
Communication Team / Equipo de Comunicación

Though Sweden is considered the pioneer in the shift towards digital payments, many issues remain unaddressed. Officially, the share of cash transactions have decreased steadily since 2007, mainly driven by the push for alternative payment methods including mobile apps. In addition, figures of the Riksbank – the central bank of Sweden – indicate that 95% of Swedish consumers own a bank account, facilitating a possible shift to cashless.

Nevertheless, Christina Wejshammar – Riksbank Head of the Cash and Payment systems department – reminded that a shift to cashless is possible only if consumers trust their public institutions and the alternative solutions offered. Moreover, she affirmed that the transition must be slow enough to help customers relying exclusively on cash to find other payment instruments and thus ensure that nobody is left behind, a task that may prove extremely difficult.

Furthermore, a fully digitalised system can be extremely vulnerable to data breaches. Recent attacks carried out against financial institutions and leading companies demonstrate how sophisticated and uncontrollable hackers’ actions can be. Moreover, consumers would be deprived of access to their money in case of a system failure or natural disaster, leaving them without any resource. And finally, the demise of cash would go hand-in-hand with a loss of privacy as every transaction could be traced and registered, a major drawback that not everybody is ready to accept.

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