Why the convergence of cash and cashless based society is the future

By : Colin Gordon

April 26, 2016 01:12 PM

Last month myself and a colleague made a trip over to Stockholm,

Sweden as part of an ATM Innovation Forum that NCR hosted. This

represented a very interesting opportunity to firstly meet with the

country’s ATM operators and financial institutions, as well as first hand

observe and analyse the much hyped apparent move of Sweden

becoming the world’s first cashless economy.


The ATM market and cash use


Firstly some background, Sweden currently has approximately 3,000

ATMs. It is a somewhat ageing ATM install base, with the market mainly in

future expected to be made up of ATM replacements. What is of interest

is that each ATM handles a significantly higher volume of average transactions per month (4,700) compared to the global average

of around 2,700.


Despite the push on the cashless society, there are still around 174 Million cash withdrawals at Swedish ATMs

each year (Volume) and $24 Billion USD (Value) in cash withdrawals a year. Whilst acknowledging that there has

been a slight decreasing trend – consumers clearly do still have an appetite for cash and the ATM and most

importantly the central bank is issuing new banknotes and coins later in 2016.


Going fully cashless – or are they?


The financial technology media is full of references to Sweden almost being the vision of the future when it comes

to retail banking, citing an alleged decreasing demand for cash in a market where card, mobile and P2P payments

are well established. Yes – I observed the fact that consumers are indeed ahead of those in many other countries

in terms of embracing more emerging digital payment methods. Banks are very keen on a ‘cashless’ society. This

has meant that technology such as payment cards and mobile are well established with consumers and being

used for all types of purchases of low value and high volume.


The main observation we made in Sweden is that it is a very interesting ‘test case’ for what may happen globally

such is the push to become cashless. Banks appear to be ‘leaping’ over the next phase of ATM innovation (such as

Multi-Function and Branch Transformation) to go to straight to mobile and digital payments. Banks want to reduce

cash usage and drive customers to internet and mobile. What has however become a possible ‘fly in the ointment’

in the last few days is that the central bank in Sweden appears to have put a halt to this push to a 100% cashless



Trying to go cashless


We had heard so much about the cashless society in Sweden, that we decided to see if we could get through the

week without any cash. We both arrived in the country with no Kroner. The taxi to the hotel was easy, as they only

accept cards, no cash at all. Everything was going well until needing to use the bathroom at lunchtime in a

shopping center before a customer meeting. I arrived there only to find there was a charge of 10 Kroner, which is

a coin. This meant I had to withdraw cash from a nearby ATM and then get it changed into coins at a cafe to get

access to the facilities. Whilst not an ideal consumer experience, it highlighted perfectly a really practical challenge

of assuming full adoption of cashless by everyone. So our experiment failed when we literally had to spend a



The future – digital payments and cash together


The recent government announcement in Sweden combined with the self-service reinvention going on seems to

suggest that both mobile payment, cashless and the ATM with cash are all going to be important channels for

consumers in the future. Financial inclusion for all is clearly important.

There will remain a fundamental legal requirement that places a duty on banks to provide cash services as a basic

feature of payment accounts. Banks would appear to have reduced their cash handling services too fast, resulting

in a lack of access to cash in less populated areas in particular. These are the main observations of the 

government putting a halt to this full adoption and removal of cash.


What does this mean?


Cash is still important to consumers. It’s trusted, secure, reliable and has a tangible sense of worth, particularly

handy when budgeting. Yes, a cashless society may appear but not to the overall decline of the ATM and cash.

What may transpire is a very interesting world of ATM and mobile convergence and the focus on an omni-channel

experience where consumers have a choice of transactions.

Colin Gordon

Financial Services SelfServ, Marketing Manager

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Colin Gordon is a Global ATM Marketing Manager based at NCR’s R&D Center in Dundee, Scotland. Colin is responsible for the marketing of NCR’s financial hardware portfolio with a specific focus on activities such as demand generation, sales enablement, market analysis and customer engagements for the ATM business.