Reduced use of cash natural consequence of digitalisation
Economic Commentaries, News Cash usage is declining rapidly in Sweden. This appears to be driven by decreasing demand. Quite simply, the general public prefers electronic payments such as debit cards and Swish. In a new Economic Commentary, the authors argue that this is a natural consequence of digitalisation.
The Economic Commentary Times are changing and so are payment patterns, which is partly based on the survey Payments patterns in Sweden, analyses changes in the supply of and demand for cash. It is, of course, difficult to clearly distinguish various drivers here, but with the aid of data one can obtain a better picture of what lies behind developments. One cautious conclusion is that lower demand appears to be the strongest driving force.
The authors also argue that what we are seeing here is a natural result of technological advances – digitalisation – that affect society as a whole, and not just payment patterns. Technological advances often entail changes in our ways of making transactions with one another and thereby also forms of payment. This development is essentially positive. On the other hand, there are groups that are negatively affected by the rapid developments and for whom reasonable solutions should be found.
By Frida Erlandsson and Gabriela Guibourg, who work at the Riksbank's Payments Department.
The Riksbank’s Economic Commentaries contain, for instance, short analyses and debate articles. The opinions expressed in Economic Commentaries are those of the authors and are not to be seen as the Riksbank’s view.