“Cashless Society” Nordics: Key takeaways for payment markets in continental Europe

By far the most advanced payment markets in Europe can be found in the Nordic countries. This is evident in their high number of cashless payment transactions per capita as well as in high transaction values. Non-cash payment methods have dominated the payment space for years and both legislative changes and continual innovation have further added to the diminishing use of cash.








By far the most advanced payment markets in Europe can be found in the Nordic countries. This is evident in their high number of cashless payment transactions per capita as well as in high transaction values. Non-cash payment methods have dominated the payment space for years and both legislative changes and continual innovation have further added to the diminishing use of cash. As this high level of maturity in the payment market is reflected in many aspects of everyday life, the Nordics are also frequently referred to as the first “cashless societies”. For the less mature European payment markets, the Nordics provide an interesting case study in market dynamics and trends.


A closer look at the maturity of the various European markets shows a heterogeneous picture with a broad spread in the adoption and frequency of day-to-day use. Most Central, Eastern and Southern European countries are at the lower end of the payment maturity matrix. In comparison, Benelux, Portugal, France, and Ireland are already conducting three to five times more transactions per capita per annum. The three most advanced payment markets in Europe, however, are the three Scandinavian countries: Denmark, Sweden, and Norway as the distinct number one, followed in fourth place by the UK.


















Transaction value

(per capita p.a. in kEUR)

No. of transactions

(per capita p.a.)






















Source: ECB Payments Statistics September 2017, Norges Bank Papers Retail payment services 2016

When directly comparing for instance the German and Scandinavian payment markets, the gap is striking. Around 50 card transactions are made annually per capita in Germany, while in Sweden and Denmark the average is around 400 transactions. In Norway, as many as 500 transactions are made per capita. Or to put it another way: on average, Scandinavians conduct 8 (DK, SE) to 10 (NO) times more card transactions than Germans. Consequently, cashless revenues are also significantly higher: While in Germany an average of €3,200 is spent in non-cash payments, cashless spending amounts to €11,000 in Sweden and Denmark and €23,000 in Norway (this is in part due to Norway’s higher purchasing power, however).


Taking a retrospective view of the development, quantitative analysis indicates that many continental markets are currently at a similar stage to that of the Scandinavian markets at the turn of the millennium or even before. Hence having almost an additional generation of experience with cashless payments, these markets provide very interesting case studies that can be used to gain understanding of market dynamics and future developments for continental Europe.


The progression towards a cashless society is accompanied by decreasing cash acceptance at the point of sale (POS), which has brought about significant changes and adaptations in everyday life in the Nordics. Small businesses such as independent shops, restaurants and petrol stations increasingly refuse to accept cash payments. In many cases, micropayments such as for public transport tickets, public washrooms, street magazines sold by the homeless or church donations can no longer be made in cash. The Scandinavian banking sector is also contributing by minimizing counter services (as a cost-cutting factor and for fraud-prevention purposes) and in some cases even refusing cash deposits.


Along with a quite consolidated banking industry, which acts cooperative in the payment market, three main drivers can be identified behind the decreasing use of cash: Regulation / legislation, technological aspects as well as cultural characteristics:


  • Initiated by Scandinavian central banks, cash supplies (M0 – Notes and coins in circulation) have been systematically reduced over recent decades. Sweden, for example, has decreased its total amount of cash by 40% since 2007, and has withdrawn its largest bill (SEK 1.000, equals approx. EUR 100) altogether. New legislation has also played a part: the role of cash as the legal payment method for certain market segments has been lifted, and tax reductions for housing-related services have been introduced in order to curtail the shadow economy (which is primarily based on cash payments).
  • Technological innovation has also contributed to the decreasing importance of cash. For instance, mobile payment acceptance and contactless payments via NFC were adopted relatively early here. Today hands-free checkout services are becoming common. These allow for in-store self-scanning of products via mobile app and, in some cases, completion of the payment in the app as well. However, the most remarkable development is the breath-taking pace at which mobile payments have gained relevance in day-to-day life within the last three to five years. The MobilePay (DK), Swish (SE) and Vipps (NO) solutions were all introduced as open apps for peer-to-peer payments that gained significant market penetration among users, achieved a “critical mass”, and evolved into commonly used payment methods at the POS. Today, these payment solutions are commonly used by more than half of the population in the Nordics. This speed of adoption of new payment solutions is remarkable and unique in Europe.
  • Finally, cultural aspects must also be recognized as key drivers of this development. Due to the high level of public access to official records legally enshrined in Scandinavian countries, these societies are used to a more open approach to personal data when compared with other countries in continental Europe. A higher level of openness to innovation can also be readily observed. Not by chance has “Swisha” been co-opted into the Swedish language as a term for sending money, and the adoption of “Vippse” is currently being discussed by the Norwegian language council.


The high penetration of cashless payments in everyday life in the Nordics also shows that a “cashless society” is a realistic scenario, at least to a certain degree. The outlined development gives an indication of where other European payment markets could be headed in the coming years and decades. In order to foster cashless payments in other European markets, key requirements are a regulatory / legislative tailwind supporting the war on cash and a highly cooperative banking industry. In order to accelerate the development of mobile payments, a critical mass of users has to be activated. This requires open solutions addressing the full market and a clear focus on single but relevant and simple use case – as was seen with the launch of MobilePay, Swish and Vipps


Established in 1987, Arkwright is a strategy advisory firm with a staff of about 100 professionals and partners with offices in Hamburg, Oslo, and Stockholm. Arkwright is owned by its management staff.


At Arkwright, we are pragmatic about methodology and passionate about creating results for our clients. Because every client faces its own set of unique challenges, we believe that each one requires tailored, client-oriented advice based on strong analytical skills and profound business know-how. We deliver expert industry insight and relevant facts that contribute to our clients’ success and make a difference.


Arkwright Consulting AG Hamburg - Frank Wunderlich
Arkwright Consulting AG Hamburg - Steven Jacob