Sweden's transition to a digital payments market, while largely successful, has also presented significant challenges, according to a report by Riksbank, the country's central bank. The report highlights that despite the efficiency of digital transactions, the shift away from physical currency has not been entirely positive.
In a press release issued by Riksbank, it was noted that digital and financial exclusion and fraud are among the key drawbacks of phasing out banknotes. "Payments must work for everyone. In the longer term, all payments may be digital—but until then, cash plays an important role. We need legislation to ensure that cash can be used to pay. Banks must also ensure that more customers have access to payment accounts. These are important prerequisites for everyone to be able to pay today and in the future," said Erik Thedéen, Governor of Riksbank.
According to a government report published in October 2023, Sweden launched an inquiry in 2000 into its role in the payment market. The inquiry concluded in late 2023 and focused on evaluating the importance and necessity of certain means of payment as legal tender and the need for Riksbank's digital currency, the e-krona.
Riksbank has called on the government to extend and broaden this inquiry in another press release. The central bank suggested that the investigation should consider how cash can be transported affordably to and from retail outlets. Currently, only one private company offers this service. Furthermore, Thedéen recommended that proposals regarding the roles of banks, Riksbank itself and other authorities in cash transportation during disruptions should be submitted by the investigator appointed to conduct this inquiry.
"Public and private actors must work together to ensure that everyone in society can pay and contribute to the functioning of the payment system in the event of disruptions, in peacetime crisis situations and in states of heightened alert," stated Riksbank in the press release.