Introduction:

A typical day in Sweden? You would actually board a bus using your smartphone, grab a coffee with a tap of your card, and pay for groceries through a mobile app. No cash exchanged hands. In fact, in 2025, only 10% of transactions in Sweden involve cash, with mobile payments and cards dominating the landscape.

Sweden's transition towards a cashless society is one of the most advanced in the world, driven by technological innovation, government policy, and a public eager to embrace digital solutions. But this rapid shift raises critical questions: Can a nation function without physical money? What are the implications for privacy, inclusivity, and global financial systems?

Sweden's journey towards a cashless society began in earnest with the introduction of Swish in 2012, a mobile payment system enabling instant transfers between individuals and businesses. By 2025, Swish boasts over 6.9 million users, covering more than two-thirds of the population. Complementing Swish, BankID provides a secure digital identification system, facilitating seamless online transactions and services.

The Swedish central bank, Riksbank, reports a significant decline in cash usage over the past decade, attributing this trend to the widespread adoption of instant payment services like Swish. This shift is further supported by near-universal 5G coverage and a robust digital infrastructure, making digital payments both convenient and secure for the majority of Swedes.

For many Swedes, the transition to a cashless society has been largely positive. Digital payments offer convenience, speed, and enhanced security. Transactions are processed swiftly, reducing the need for physical cash handling and the associated risks.

However, this shift has not been without its challenges. A segment of the population, particularly the elderly and those in rural areas, faces difficulties in accessing and using digital payment methods. Concerns about digital exclusion have prompted discussions about the necessity of maintaining cash as a viable payment option.

Banks and the “Bankless” Concept

Traditional banks in Sweden have had to adapt to the changing financial landscape. While many have embraced digital transformation, the rise of fintech companies poses a challenge to their traditional business models. Companies like Klarna and iZettle have revolutionized payment solutions, offering alternatives to conventional banking services.

Despite the growth of fintech, the Swedish central bank continues to play a pivotal role in the financial ecosystem, ensuring monetary stability and exploring the potential of a central bank digital currency (CBDC).Sweden's move towards a cashless society serves as a model for other nations considering similar transitions. The benefits include increased efficiency, reduced costs associated with cash handling, and enhanced transparency in financial transactions.

However, the Swedish experience also highlights potential pitfalls. Issues related to digital exclusion, cybersecurity, and the centralization of financial control are concerns that other countries must address when contemplating a shift towards a cashless society.

Lessons for Africa and the Global South

For many countries in Africa and the Global South, mobile money platforms like M-Pesa have already demonstrated the transformative power of digital financial services. Sweden's experience offers valuable lessons in infrastructure development, regulatory frameworks, and public-private partnerships. However, the rapid pace of digital adoption in Sweden also serves as a cautionary tale. Ensuring that all citizens have access to digital financial services and that their privacy is protected should be paramount considerations in any move towards a cashless society.

Looking ahead, Sweden is exploring the introduction of an e-krona, a central bank digital currency. The Riksbank has been investigating the feasibility of the e-krona since 2017, aiming to provide a state-backed digital currency that complements existing payment methods. The potential benefits of the e-krona include enhanced monetary policy tools and greater financial inclusion. However, challenges related to privacy, security, and the implications for the banking sector must be carefully considered.

Redefining Money

Sweden's journey towards a cashless society underscores the profound impact of digital innovation on financial systems. While the benefits are evident, the challenges highlight the need for inclusive policies that ensure no one is left behind in the digital transition.

As other nations observe Sweden's experiment, the question remains: Can a cash-free society redefine global finance, or does it risk creating a new set of inequalities? The answer lies in balancing innovation with inclusivity, ensuring that the future of money serves the needs of all citizens.