- The threat of war forces a rethink of how services are paid for
- Norway and Sweden return to cash
- Nordic citizens urged to use cash
The threat of war forces a rethink of how services are paid for
In recent weeks, geopolitical tensions in the region have escalated, with the US allowing Ukraine to launch ATACMS missiles far into Russian territory. Russia has responded by changing its nuclear doctrine and launching several massive attacks on Ukrainian cities.
Telecommunication cables were cut in the Baltic Sea, initially attributed to possible sabotage. This week, a DHL cargo plane crashed in Lithuania. Although the initial reports suggest that external forces did not cause the incident, the story of a Russian sabotage campaign in the summer and plans to send incendiary devices from Lithuania to the UK and Germany on DHL planes was recalled.
Rising tensions make us think not only about global security or the real threat of war but also about the practicalities that would change in an instant if the world got involved in another large-scale conflict. Perhaps above all, then, there is money.
Many people think that the safest thing to do in the event of a war is to have a pile of cash. However, in today's extensively digitized world, cash is not always the primary means of payment for goods and services. In light of today's realities, the world's most financially digitalized countries, such as the Scandinavian countries, are changing their policies.
Norway and Sweden return to cash
The Nordic countries have been moving rapidly towards a cashless future, but the geopolitical situation is changing that. Now, Sweden and Norway are abandoning their plans for a cashless society. This is due to fears that fully digital payment systems will become vulnerable to Russian security threats[1].
The Swish mobile payment system is widespread in Sweden, whether in markets, cafés, or supermarkets. The Norwegian equivalent, Vipps, is also very popular. However, citizens of these countries are now encouraged to return to cash.
In 2018, the former deputy governor of the Swedish Central Bank predicted that Sweden would probably be cash-free by 2025, but the Russian invasion of Ukraine in 2022 ended all plans. This was followed by cross-border hybrid warfare and cyber-attacks blamed on pro-Russian groups.
The Swedish government has completely overhauled its defense and preparedness strategy, joined NATO, launched a new form of national service, and revitalized its psychological defense agency to counter disinformation from Russia and other adversaries. Norway has tightened control of its formerly porous border with Russia, and countries are now changing the way people pay for goods and services.
Nordic citizens urged to use cash
In a brochure entitled "In case of crisis or war", sent to all Swedish homes, the country's Ministry of Defence advises people to use cash regularly and have at least a week's supply of various bills. The government is also considering legislation to protect the ability to pay for certain goods in cash.
Norwegian retail customers have always had the right to pay in cash, but this has not been guaranteed and in recent years more retailers have started to use non-cash payments, leaving around 600,000 people without access to digital services without the ability to pay in cash.
In the summer, the government introduced legislation that could penalize or sanction retailers if they do not accept cash payments.
Financial experts are also increasingly recommending that everyone carry some cash, as digital payment solutions are vulnerable to cyber-attacks. In addition, Norway and Sweden have taken measures after the dangers of a cashless society became apparent in the summer, when a technological error led to "the world's biggest IT failure".
Dubbed a digital pandemic, a bug in a software update caused global chaos, with computers and systems crashing in shops, banks and hospitals[2]. In addition, Google discovered a nine-month-long cyber-attack linked to Russian spies.
On the other hand, Hans Liwang, professor of defense and security systems science at the Swedish Defence University, says there is currently still a lack of evidence on whether cash is superior to digital payments in the face of modern threats. In this context, he pointed to Ukraine, where digital systems have proven to be very important.
