Editor's Choice Europe Fintech

How Nordic Countries are Leading the Way to a Cashless Future

Long before the COVID-19 pandemic sparked a wave of speculation that consumers would shun physical currency in favour of contactless payments for the foreseeable future, cash was on the decline. The growth of e-commerce, fintech innovation, and mobile wallets have combined to see cash’s share of global payments nose-dive over the past decade. According to the 2020 McKinsey Global Payments Report, across select emerging markets, the share of cash payments dropped from an average of 95.7% in 2010 to 77.9% in 2020. In mature markets, the proportion plummeted from 58.9% to just 28.1%.

For Jonas Albinsson, Director of Sales & Business Development, Nordic Region, Credorax, one country featured in McKinsey’s analysis stood out as uniquely post-cash. That distinction went to Sweden, where the consultancy reports that only 9% of payments are now cash-based, compared to 56% in 2010. Indeed, Sweden and its fellow Nordic countries are at the cutting edge of the move toward cashless societies. Among older shoppers in Sweden, Denmark, Norway, and Finland, cards are king, while younger consumers are increasingly gravitating toward digital payments, like the growing number of e-wallets. 

Jonas Albinsson, Credorax

Here Albinsson looks at what is behind the Nordics’ sharp shift away from cash – and what does it portend for the future of payments? Is the world headed toward a cash-free future?

An Evolving Global Market

While Nordic countries stand out for their rapid and widespread adoption of non-cash payments, the same general trend is unfolding across developing and developed countries alike. With the customer experience now seen as the holy grail for businesses of all stripes, supporting alternative payment methods is a means of offering customers choice and convenience. 

Meanwhile, digital payments solutions now on the market provide lower costs for merchants, while also delivering better payment security protection and making it easier to comply with anti-financial crime regulations. No less important, integrating non-cash payment options is critical for businesses looking to expand globally, particularly in the age of cross-border e-commerce.

That’s a concept readily understood in the Nordic region, where e-commerce has been more prevalent than in other European countries. Data compiled by Eurostat, the European Union’s statistics agency, reveal that in 2019, 82% of Swedes and Norwegians, 84% of Danes, and 73% of Finns had purchased goods or services online within the previous year. That stacks up against an EU average of 63%.

Nordic Culture and Cashless Payments

Although market forces account for much of the shift toward cashless payments, cultural factors also help explain why countries in the Nordic region have been ahead of the curve compared to other countries.

The Nordic countries are famously high-trust societies, a fact which has heavily influenced the development of Nordic politics, business, and culture. It’s not difficult to understand, then, why Nordic populations have shown a greater willingness than their counterparts in lower-trust countries to make payments via credit card. The foundation of credit, in the final analysis, is trust.

This convergence of various economic, commercial, and cultural factors has led some analysts to forecast that Sweden could become the world’s first officially cashless society by 2023. Whether those predictions pan out remains to be seen – but for merchants in Nordic countries and beyond, the trendlines in the region offer important insights. Supporting e-wallets and digital payments is rapidly becoming a must, not merely a nice-to-have, and meeting customers where they are will mean coming to terms with a future in which cash continues to play a diminishing role.

What makes the Nordic countries exceptional isn’t that they’re moving away from cash while the rest of the world is not. Instead, it’s that these countries are much farther along on the journey toward post-cash (or, at the very least, low-cash) societies. Take note: As with Ikea, Spotify, and H&M, this Nordic phenomenon will expand worldwide.


  • Gina is a fintech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.

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