Payments in Sweden 2020

Are payments in Sweden efficient?

Paying by mobile or card is cheaper than using cash

Published: 29 October 2020

Some costs are fixed and do not depend on how many payments have been carried out, such as rent for premises and purchases of hardware. Other costs are variable and depend on the number of payments, such as petrol for the vans that transport cash and the cost of sending electronic notifications. The fixed costs mean that there are economies of scale to be gained in the infrastructure as the average cost for making a payment falls when the number of payments increases. Economies of scale are, however, greater for digital payments than for cash, as cash must be handled physically and has higher variable costs than digital payments do. When the number of digital payments increases and the amount of cash payments decreases, cash becomes relatively more expensive to handle while digital payments become cheaper.