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Payments Report 2022

In Sweden, we prefer to pay digitally

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The digitalisation of the payments market is a global trend

Published: 15 December 2022

It is in the Nordic countries, in particular Norway, Sweden and Denmark, that the use of cash has decreased the most in favour of digital payments. In these countries, more than 80 per cent of payments in physical shops are made by card or mobile phone. In the euro area and in countries such as the United States, United Kingdom and Australia, cash payments are more common but more and more people started paying digitally there too during the pandemic. In the United Kingdom, for example, the number of cash payments fell by around 25 per cent in 2020.

FACT BOX - Decline in cash in Sweden stands out internationally

In most advanced economies, demand for cash is growing while the share of cash payments is declining. This is a phenomenon known as the cash paradox.

The cash paradox is often explained by the public’s desire to have cash as a means of saving, especially in times of crisis. Internationally, this is also reflected in the statistics on the amount of cash in circulation. Often, the amount of cash in higher denominations, which is particularly suitable for savings, increases, while the amount of cash in smaller denominations decreases.

The decline of cash in Sweden differs from the international development in two ways. Firstly, the cash paradox does not apply, as the increase in digital payments has gone hand in hand with the decrease in the demand for cash. The amount of cash has almost halved since 2007. Secondly, the amount of cash in both small and large denominations has decreased in Sweden over the same period.

However, the fact that the amount of large denominations is decreasing in Sweden does not necessarily mean that the demand for cash as a means of saving has decreased. It may also be due to supply factors, such as the fact that the 1,000-krona banknote has become more difficult to obtain as bank branches with cash handling facilities have disappeared. Those wishing to save in Swedish cash may, in practice, have been forced to save in lower denominations.