After dreaming of a cashless society, Sweden makes urgent preparations for the script for falling electronic payment systems

The Central Bank of Sweden, the northern country in which banks and traders have encouraged residents for years to give up cash, announced on Friday that it has reached an agreement with payments to establish a system by the middle of next year to allow the Swedes to pay essential goods in the case of an online service.

The Reuters agency recalls that Sweden households use very rarely cash for payments in stores, a report published last year by Riksbank, the central bank of the country, showing that the percentage of the Swedes who said they used physical money to pay their last shopping to 8% by 2022. In that year the percentage was 10%.

“However, (…) Other data suggest that the use of cash continues to decrease. A possible explanation for the observed growth is that, in 2023, natural persons used withdrawn reserves in the context of Ukraine's large -scale invasion,” Riksbank note.

The fear of the central bank in Stockholm and the Swedish government is that the preference for electronic payments makes the country residents vulnerable to possible technical problems or sabotage acts that could affect online transactions.

Swedes' predisposition for electronic payments worried the authorities

Riksbank warned at the beginning of last year that access to cash money “has been significantly damaged” in the country, as more and more banks closed their cash services. The central bank then asked the financial institutions to take urgent measures to improve the situation.

However, given the small percentage of Swedes who are currently using cash and increasing the popularity of applications that allow payments with the phone, RiSksbank has now decided that the system to make possible payments in case of electronic systems to use all cards. Thus, payments will become possible offline by using physical cards and related PIN codes, Riksbank said in a statement.

“The fact that the general population will be able to pay with the card, for example for food and medicines, even in the case of a serious fault of data communications – ie offline – it is an important stage in our intensified efforts to strengthen the preparation for emergencies,” said Governor Riksbank, Erik Thedéen, quoted in the statement.

And Sweden is not the only European country that prepares such a system of payments. The Reuters agency reported in May that Finland, Norway, Denmark and Estonia implement offline payment systems as a backup measure for scenarios where Internet connections are lost, including sabotage.