Cash Worldwide: Spending in Sweden

As the world’s media obsesses about the move to a cashless society, CMS Analytics will be documenting first-hand payment experiences across the globe. With Scandinavia seemingly leading the cashless revolution, our first destination finds CMS Analytics’ Marketing Executive, Josie Penfold, providing an insight into the daily life of a consumer in Sweden.

Sweden is leading the race in becoming the world’s first cashless society. According to the Financial Post, the circulation of the Swedish krona has decreased more than 40% since its peak in 2007, with card becoming the preferred payment method by consumers. Insight Intelligence’s annual survey also revealed that just 25% of Swedes use cash in a transaction at least once a week in 2017, down from 63% in 2014. With the introduction of the popular instant-payment app system Swish in 2012, demand for note and coin has been declining.

But what does this mean for Swedish tourists and the travel money industry?

At the beginning of September this year, I visited the vibrant, charming ‘city on water’ that is Stockholm. Individual islands linked by bridges and ferries create a marvelous patchwork of color and culture, and despite its historical foundations and world-famous museums, Stockholm is anything but an antique.  Instead, the city is modern, high-tech, and dynamic. And while these qualities are attractive, the technological advancement of Sweden’s preferred payment methods compared with other destinations I had previously visited came with some personal challenges…

I found myself in a predicament of having krona to spend and nowhere to spend it. I was first introduced to this cash-free society in the Fotografiska Museum. I stood in a long queue, eagerly awaiting to get inside. However, once I reached the till-point with my hands full of two-hundred or so crumpled krona, the customer assistant was quick to point to the ‘card only’ sign and tell me that in Sweden, ‘card is king.’ From there onwards, I was confronted with ‘card only’ and ‘cash free’ signs in every museum, and in many cafes and restaurants. Unprepared for such circumstances, a UK debit card became my only means of payment, as I continued to look for any opportunity to spend as much of the physical krona as possible. Although I have little issues of relying on card payments at home, the additional hidden charges for non-sterling transactions and uncertainty regarding my bank’s conversion rate played on my mind.

While research indicates that 78% of British holidaymakers take cash abroad, it seems that traveling to Sweden may be an exception to this notion. Indeed, WeSwap has stated that 81% of tourists visiting Sweden use card – and I quickly became a part of this statistic. As would be expected then, cash demand for Swedish krona are down in the peak period for 2018 compared to 2017 in the travel money market (Figure 1). Additionally, passenger numbers are down YoY and are estimated to be 2% down for August and September (Figure 2), although only marginally. With cash demand down, are tourists becoming more aware of Sweden’s move towards a cashless society? (I was warned by a bureau about Sweden’s cashless intentions which perhaps is a message that is passed to many expected British before they purchase their krona. However, I stuck with the traditional ideology that ‘cash is king’ with the belief that it is always sensible to have some cash reserves, especially abroad.)


Figure 1: Swedish Krona Demand


Figure 2: Sweden Passenger Numbers Direct from UK Airports (CAA)

But it’s not just Sweden who is pushing towards a cashless society. Norway and Denmark appear to complete the three-way battle of who can become the first cash-free Scandinavian country. Indeed, Danmarks Nationalbank, Denmark’s central bank, has stated that fewer than 25% of payments use cash in Denmark; while Norway’s central bank has claimed that less than 10% of transactions use cash.

With the likes of Revolut, N26, and Monzo quickly becoming competitive alternatives to cash, along with the global increase of cash-free societies, the pressure is heightening for bureaux and travel money retailers. These challenger entities have the benefit of near spot rate exchanges, zero fee transactions when transferring money overseas, and free cash withdrawals from foreign ATMs up to a certain amount each month, making them a suitable cash alternative for the British tourist. As these fintech solutions are becoming progressively popular, travel money may be moving towards technology at a faster rate than expected, as the Netherlands, Norway, and Denmark – to name a few – like Sweden, promote their use with their ‘cash-free’ motto.

However, the ‘cash-free’ life isn’t necessarily the best move for everyone in society, especially at such a quick rate. According to the BBC, the elderly and other vulnerable generations fear that this change is occurring too fast.  Some groups do not own, nor know how to use, computers to make online payments and monitor their online banking. Despite the SEB, one of Sweden’s largest banks, introducing ‘learning support’ to assist these vulnerable people, the change appears to be moving at too fast a rate to help everyone. However, a recent statement from the Riksbank’s Governor, Stefan Ingves, states that all institutions that offer payment accounts will be obligated to handle cash. The central bank also indicated that it needs to be clear which public services, along with medical care, will be obliged to accept cash in the public interest.

It looks like there’s life in the old krona yet!

Payment Scale

Sweden’s Preferred Payment Choice

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