By : Colin Gordon
April 26, 2016 09:12 AM
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
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.