"All banks should be obliged to handle cash", says Riksbank committee

calendar iconOct 23, 2018

The recent proposal for major banks to secure cash access across Sweden from a key Riksbank committee in review of the country's monetary policy represents a significant shift in the war on cash.

Over the past few decades, Sweden's increasingly cashless culture has been tainted as the first piece of evidence suggesting that the world is going cashless. However, not everyone is on board with Sweden's global influence favouring a cashless future.

On June 4th, 2018, Riksbank governor Stefan Ingves, compared monetary policy to health, explaining how when it works one doesn't think about it, but when it fails, it's all one can think about. In relation to cash access, Ingves believes that the same mentality applies.

"The background to this is formed by the rapid changes on the payment market and the rapid decrease in cash usage in Sweden – a development that we are practically alone in, worldwide. [...] This means that we have to take the lead and prepare for the new situation faster than other countries." Stefan Ingves

After publishing its interim report, "Tryggad tillgång till kontanter" or Secure access to cash (SOU 2018:42) in June, a consultation was held by the Riksdag committee on Riksbank proposing all major banks and other credit institutions shall be obliged to offer cash services.

“The possibility to make deposits shall be included in the concept of cash services. This is a service that consumers can reasonably expect of banks,” says.
"Stefan IngvesGovernorSveriges Riksbank

The push to protect cash from within Riksbank is years in the making.

In March 2016, Riksbank submitted a statement to the Ministry of Finance's consultation calling for the Swedish parliament to introduce a clear obligation for banks to provide basic cash payment functions that meet customers’ needs. The letter was signed by Stefan Ingves, the Riksbank Governer in response to the much too rapid reduction of cash handling services across the country.

The policy would apply to major banks - those that provide checking accounts and have more than 70 billion kronor in deposits from the Swedish public. The proposal also includes “reasonable access to those services in all of Sweden,” meaning that 99% of Swedes should have up to 16 miles to travel for a cashpoint.

“We believe that the continued development of access to cash in society needs to take place in a controlled manner so that the public’s and society’s need for cash is fulfilled,”
"Riksbank CommitteeDagens Nyheter op-edAs quoted via Bloomberg

Over the past year, policymakers have been reconsidering the two main issues that would arise in a cashless Sweden:

  • the needs of the elderly population, alienated by new technology,
  • and the needs of the entire country in the face of a power outage.

The proposal has sparked a nation-wide cash debate. What body should be responsible for making cash accessible in Sweden?

According to reports by Bloomberg, Sweden's competition and financial watchdogs both oppose the proposal. Arguing that access to cash should be the responsibility of the state and not private banks, are Financial Supervisory Authority and ATM provider, Bankomat. They look to the state because the handling of notes and coins is such an important part of a country’s infrastructure.

Excerpt from Riksbank (Oct 22, 2018)

As cash use is declining rapidly, it is important that the Riksdag adopt a position on the issue of what constitutes legal tender in Sweden and its connection to the Swedish krona as a currency. Any legislation should be as technology-neutral as possible in order to also be applicable to any future means of payment issued by the Riksbank.

Read full Riksbank article here

Excerpt from Riksbank Execuive Board response (October 17th, 2018)

The Riksbank supports the Riksbank Committee’s proposal to extend the scope for government support to companies that enables another company to provide basic payment services. The Riksbank also supports the proposal to increase information and marketing efforts as regards the possibility to apply for government support for the provision of basic payment services.

Read full letter from Riksbank's Executive Board

Related articles

Seven in 10 Swedish people want to keep cash
An overwhelming 68% of Swedish people polled in a survey have stated that they are not on board with a cashless future. The survey was commissioned by Bankomat AB, an ATM chain company from Sweden created in cooperation between a number of banks in September 2010....

Sweden worries a dash to cashless is too rash
Going cashless was once a dream for Sweden, but experts now warn it could quickly turn into a nightmare for the Scandinavian country. The nation's parliament has thus launched a review on the impact of going cashless after fears that it dramatically excludes the needs of the elderly, children and tourists who rely on cash.

The shortsighted race to a cashless future: Sweden
Is Sweden really on the brink of cashlessness? And if so, should that be celebrated? Brett Scott warns consumers to first consider the downside of having only digital payment options available before supporting the cashless race in a recent article titled, 'Hang on to your cash. This dash to digitise payments is dangerous'.

Spinnaker Swedish Central Bank demands access to cash (Mar 21, 2016)
Sweden’s death of cash might be some time away. The Governor of the Swedish Riksbank today issued a statement that the availability of cash should be a legal right in Sweden. Stefan Ingves went on to say that banks have reduced their cash handling services too quickly. This has led to a lack of availability of cash to the public in general.

Finextra Swedish central bank calls halt on moves to a cashless economy (Mar 18, 2018) While other central banks ruminate on ways to replace cash with digital currencies, Sweden's Riksbank is kicking against the grain with calls for access to cash to be a legal right. Often lauded as a country well on its way to becoming a cashless society, the Riksbank has taken a stand against moves to eliminate access to notes and coins in the country.

Bloomberg People in Sweden Now at Risk of Losing Access to Notes (Feb 28, 2018) People living in the world’s most cashless society may soon lose their access to notes and coins. To avoid that extreme scenario, Swedish cash-handling provider Loomis AB wants authorities to force banks and retailers to continue accepting cash.

Bloomberg Sweden Tries to Halt Its March to Total Cashlessness (Jun 11, 2018) A key committee of Swedish lawmakers wants to force the country’s biggest banks to handle cash in an effort to halt the nation’s march toward complete cashlessness. Parliament’s Riksbank committee, which is in the process of reviewing the central bank law, proposed making it mandatory for banks to offer cash withdrawals and handle daily receipts.

Last Updated: Dec 10, 2019