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What you need to know about Sweden’s new cash law

What you need to know about Sweden's new cash law
Fewer and fewer cafés in Sweden accept cash. Photo: Fredrik Sandberg/TT
Living and working in Sweden's cashless society is easy and convenient -- until, that is, you need to get hold of or handle cash. A new law that came in force on January 1st aims to force banks to continue to offer cash services. Here's what it means for you.
Where does the new law come from?
 
Swedes' use of cash is continuing to fall, with people in the country withdrawing just 41 billion kronor ($4.18 billion) from cash machines operated by Bankomat in the first six months of 2019, a 10 percent decrease on 2018.
 
Just 56.6bn Swedish kronor in cash was in circulation in Sweden at the start of 2018, which at just 1.2 percent of GDP is the lowest level in the world, comparing to more than 10 percent for the Eurozone. 
 
The shift away from cash is also thought to be a problem for people with mental disabilities and the elderly, and for those who live in rural Sweden. 
 
 
Currently, 64,000 people in Sweden need to travel more than 20km from their homes to visit an ATM, and 280,000 people needed to travel more than 20km to visit a cash deposit machine. 
 

The Swedish Civil Contingencies Agency has also warned that a purely cashless society could easily be paralysed in the event of a natural disaster or invasion, as all it would take would be for the internet or power systems to collapse for all payments to be impossible. 
 
How was it passed? 
 
The law — Obligation for Credit Institutions to Provide Cash Services — was announced by Swedish finance minister Per Bolund in June, submitted to parliament in September and voted through with the support of all parties apart from the Left Party at the end of November. 
 
When proposing the new law, Bolund emphasised that the government sure it would continue be possible to take out and pay in cash even in rural Sweden. 
 
“Unfortunately the banks have continued to reduce their cash services, especially in sparsely populated areas. This proposal means that the big banks will have a special responsibility to maintain cash services across the whole country,” he said when proposing it. 
 
What does it involve? 
 
The Swedish Post and Telecom Authority, which will oversee implementation of the new law, will ensure that banks holding more than 70 bn kronor in deposits offer cash services across the Sweden. The banks regulator, the Financial Supervisory Authority, will then be able to levy fines on banks that fail to comply. 
 
But if your house is crammed with overflowing piggy banks, or you have bundles of notes hidden under your mattress, you're not in the clear yet. While the new law requires the banks to ensure that everyone can withdraw cash, it only requires them to offer cash deposit services to business owners. 
 
So what changed on January 1? 
 
Not much. The new demands will only begin to apply in practice on January 1, 2021. 
 
Also, the law did not set a limit to the maximum number of kilometres citizens should have to travel to access an ATM or small businesses to a deposit machine, or specify who or what should offer these services. 
 
So over the coming months, the big banks will be doing their best to minimise the requirements in negotiations with the Swedish Post and Telecom Authority. 
 
It may be that instead of reversing the decline in the number of ATM and Cash Deposit machines operated by banks' Bankomat consortium, they delegate responsibility to one of Sweden's major supermarket chains. 
 
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Will the new law stop Sweden's move towards a cashless society? 
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Yes, but rather than spark a cash revival, it is more likely to prevent its disappearance, making it possible but still somewhat inconvenient to withdraw and deposit coins and paper money. Services like Swish and contactless credit card payments make life so easy that for most people in Sweden, cash will remain a rarity. 
 
What's next? 
 
Björn Eriksson, who leads the lobby group Kontantupproret, or Cash Protest, told SVT that with more and more shops, restaurants and cafés going cash-free, the struggle for those who wanted to keep using paper money was not yet over. 
 
“This is only a partial victory if it isn't now followed up by the retail industry taking cash. That will be the next big battle.” 
 
Will there be another law, forcing retail chains and restaurants to take cash? When the draft law went out for consultation, the Swedish Civil Contingencies Agency suggested in its response that supermarkets, pharmacies, petrol stations and health services — all of which would be essential in a crisis — be required to accept cash.

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