Sweden to halt total cashlessness with lawmaker proposal

STOCKHOLM: 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 cash receipts.

The requirement would apply to all banks that provide checking accounts and have more than 70 billion kronor (US$8bil) in deposits from the Swedish public, according to a committee report.

The lawmakers said there needs to be “reasonable access to those services in all of Sweden,” and that 99% of Swedes should have a maximum distance of 25km to the nearest place where cash can be withdrawn.

The requirement doesn’t state how banks should offer those services, and lenders can choose whether to use a third party, machines or over-the-counter services.

The move is a response to Sweden’s rapid transformation as it becomes one of the most cashless societies in the world.

That’s led to concerns that some people are finding it increasingly difficult to cope without access to mobile phones or bank cards.

There are also fears around what would happen if the digital payments systems suddenly crashed.

“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,” the committee said in an op-ed in Dagens Nyheter.

The committee began looking at these issues after worries that the disappearance of cash was happening too fast.

A majority of bank branches in Sweden have stopped handling cash over the counter, and many shops and restaurants have also gone cashless.

Still, a recent Riksbank study showed that the decline of cash is driven by the fact that Swedes prefer using electronic payments such as debit cards and mobile payments.

Riksbank governor Stefan Ingves has expressed concerns that this may become problematic in a crisis situation, and suggested new legislation to safeguard public governance of the payment system.

He has also suggested forcing banks to handle cash, a view now shared by the Riksbank committee.

“We believe that the large banks have a special responsibility for the access to cash in society,” given that they are central as providers of payments and credit, the committee said. “It’s therefore not reasonable that they can completely renounce the responsibility to handle cash, especially against the background that it’s a legal means of payment.”

The committee’s proposal means “raising the ambition level” somewhat compared with the current accessibility of cash in society, it said.

If the requirements are not met, banks will face economic sanctions, whose size will depend on how large the bank is and on how much it contributes to access to cash, according to the committee. — Bloomberg

Sweden , cash , banking