Sweden – First Cashless Society?

When it comes to talking about countries becoming cashless, Sweden appears to be at the forefront of people’s minds as the leading contender to achieve this economic transition. Historically, the Swedes have a habit of steering social trends before other countries catch on so no great surprise there.

However, it is not only Sweden who received notable mentions in this space. You may have also heard countries such as South Korea, the United Kingdom and Sweden’s Scandinavian neighbors Norway, and Denmark linked to the idea of a cashless society. But given their perceived head start, just how far is Sweden from becoming cashless?

Sweden Overview

• Capital: Stockholm
• Population: 10,161,797 (2018)
• Official language: Swedish
• Currency: Swedish Krona (SEK)
• Gross Domestic Product (GDP): $601 billion

Current Cash Usage
Sweden usage of paper money is already low, and cash now accounts for just around 13% of payments made in stores, according to a study of payments by Sveriges Riksbank, Sweden’s Central Bank.

In Sweden, bank cards utilize even the smallest of purchases, causing demand for cash to drop by over 50% in the past ten years. More and more people depend on debit cards or mobile phone applications. For example, Swish, a mobile payment system which enables real-time payments between individuals and appears to be gaining traction in Sweden. The service was launched in 2012 by seven large Swedish banks in cooperation with Riksbank and has 5.5 million users as of 2017.

Looking Into The Future
As mentioned above, Sweden is already on its way to becoming cashless and more than half of all bank branches no longer handle cash. Also, seven out of ten consumers say they can manage without using paper money or coins. Half of those expect to stop expecting this traditional form of payment by 2025. But whether the Scandinavian nation becomes the first cashless country depends on a lot of factors.

Riksbank’s Cecilia Skingsley has said. “We are a candidate for sure, but nobody knows what the future holds. We should as a central bank be prepared to be able to fulfill our objective to facilitate a payment system for people, and that should also work in a digital society.”

Swedish Krona In 2018
The US Dollar has strengthened by around 10% against the Krona so far this year, making Krona one of the worst performing currencies against the dollar in 2018 so far. USD/SEK is currently trading at 9.10147 level.

USDSEK – Weekly Chart

It has been a similar story for Euro against the Krona so far this year. EUR/SEK broke above the May 2018 high of around 10.6960 reaching the highest level since 2009 at the end of last month. It is currently trading at about the 10.5926 level.

EURSEK – Weekly Chart

Sticking with the Swedish theme, fellow analyst @DeeptaGOMarkets has written an excellent article today on the upcoming Swedish election this weekend. Check it out here. 

By Klāvs Valters  (Market Analyst)

This article is written by a GO Markets Analyst and is based on their independent analysis. They remain fully responsible for the views expressed as well as any remaining error or omissions. Trading Forex and Derivatives carries a high level of risk.

Sources: Go Markets MT4