Opinion of the European Central Bank of 26 November 2019 on the requirement for certain credit institutions and branches to provide cash services (CON/2019/41)

Date: 2019-11-26
Institutions: European Central Bank
Subjects: Sweden, credit institution, financial services, money

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 26 November 2019 

on the requirement for certain credit institutions and branches to provide cash services 

(CON/2019/41) 

Introduction and legal basis 

On 26 September 2019, a draft legislative proposal from the Swedish Government on the obligations of 

certain  credit 

institutions  and  branches 

to  provide  cash  services1  was 

introduced 

in 

the 

Swedish Parliament (hereinafter the ‘draft law’). 

The ECB has decided to deliver an own initiative opinion on the draft law, since it has not been formally 

consulted  by  the  Swedish  authorities.  The  ECB’s  competence  to  deliver  an  opinion  is  based  on  the 

second  paragraph  of Article 127(4)  of  the Treaty in  conjunction  with the  second indent  of  Article 2(1)  of 
Council  Decision  98/415/EC2,  as  the  draft  law  relates  to  legislative  provisions  concerning  means  of 

payment. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European 

Central Bank, the Governing Council has adopted this opinion. 

1.  

Purpose of the draft law 

1.1  The  overall  purpose  of  the  draft  law,  which  provides  for  an  amendment  to  the  Law  on  payment 
services3, is to facilitate the  continued  use  of  cash in  Sweden,  as  well  as  to  ensure  an  adequate 

level of access to cash services throughout Sweden by requiring certain Swedish credit institutions 

as  well  as  certain  Swedish  branches  of  foreign  credit  institutions  (hereinafter  referred  to  as 

‘branches’)  to  provide  cash  services  to  consumers  and  firms.  The  draft  law  applies  to  credit 

institutions and branches that hold deposits from the public exceeding SEK 70 billion, which, at the 

date  of  the  draft  law,  includes  a  total  of  six  institutions  and  branches.  As  these  institutions  and 

branches  may  fulfil  their  obligations  by  retaining  other  cash  service  operators,  and  as  those 

operators are already established, limited associated costs are foreseen. 

1.2 

Directive  2014/92/EU  of  the  European  Parliament  and  of  the  Council4  has  been  duly  transposed 
into Swedish law5 and implemented. The draft law applies to payment accounts within the meaning 

of  Directive  2014/92/EU  and  Directive  (EU)  2015/2366  of  the  European  Parliament  and  of  the 

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2 

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4  

5  

Legislative  proposal  (2019/20:23)  on  the  requirement  for  credit  institutions  to  provide  cash  services  (Sw.  Prop. 
2019/20:23 om skyldighet för kreditinstitut att tillhandahålla kontanttjänster). 
Council  Decision  98/415/EC  of  29  June  1998  on  the  consultation  of  the  European  Central  Bank  by  national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).  
Law (2010:751) on payment services (Sw. lagen (2010:751) om betaltjänster). 
Directive 2014/92/EU of  the  European  Parliament and of  the Council of 23  July  2014 on the comparability  of  fees 
related to payment accounts, payment account switching and access to payment accounts with basic features (OJ 
L 257, 28.8.2014, p. 214). 
Law (2010:751) on payment services (Sw. lagen (2010:751) om betaltjänster. 

 
 
 
 
 
                                                 
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Council6.  Credit 

institutions 

that  provide  payment  accounts  within 

the  meaning  of 

Directive 2014/92/EU are already required to provide for the withdrawal of funds to consumers. The 

draft  law  seeks  to  further  address  the  adequacy  of  the  provision  of  cash  withdrawal  services  to 

consumers as well as cash deposit services to non-consumers. 

1.3  The  draft  law  requires  credit  institutions  and  branches  that  provide  payment  accounts  with  basic 

functions to consumers in Sweden to provide adequate cash withdrawal services to all consumers 

holding such accounts throughout Sweden. Similarly, credit institutions and branches that provide 

payment accounts to firms are required to provide adequate daytime cash deposits services to all 

customers holding such accounts throughout Sweden. The draft law suggests that the obligation to 

provide adequate access to cash services should include both proximity and accessibility. 

1.4  The  draft  law  also  provides  that  the  Government  of  Sweden  or  an  authority  appointed  by  the 

Government  may  issue  more  detailed  requirements  and  that  Post-  och  telestyrelsen  (the 

Swedish Post and Telecom Authority) be the competent supervisory authority. In the event of non-

compliance by a credit institution, Post- och telestyrelsen is, subject to certain exemptions, required 

to  transfer  the  matter  to  Finansinspektionen  (FI,  the  Swedish  Financial  Supervisory  Authority), 

which may decide to order remedial action against the relevant credit institution. If such order is not 

complied with, FI may impose an administrative penalty on the credit institution in question. If the 

non-compliance concerns a branch of a foreign credit institution domiciled outside the EEA, FI may 
intervene by way of a remedial injunction, prohibition, remark or warning or by revoking its license7. 

However,  in  the  event  of  a  breach  by  a  branch  of  a  foreign  credit  institution  domiciled  within  the 

EEA, FI may only notify the competent supervisory authority of the foreign credit institution that the 
branch  is  in  breach  of  its  obligations  under  the  draft  law8.  Thus,  in  the  latter  case,  it  is  the 

supervisory  authority  in  the  home  state  that  may  intervene  against  Swedish  branches  of  foreign 

credit institutions domiciled within the EEA. In this context, FI and Sveriges Riksbank have in their 

opinions concerning, inter alia, the provisions under the draft law stated that it is uncertain whether 

a  home  state  supervisory  authority  may  intervene  against  a  branch  of  a  foreign  credit  institution 
domiciled  within  the  EEA  following  a  breach  of  the  proposed  requirements9.  Furthermore, 

Sveriges Riksbank has requested a clarification on what means of interventions and sanctions that 

supervisory  authorities  of  other  EEA  states  would  have  if  a  branch  of  a  foreign  EEA  credit 
institution were in breach of its obligations under the draft law10. 

1.5  According  to  the  explanatory  materials  accompanying  the  draft  law,  the  ability  to  make  cash 

payments  remains  crucial  for  certain  groups  in  society  that  are  unable  to  use  other  means  of 

6  

7  

8  

9  

10  

Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services 
in the internal market. 
Chapter  15,  section  17,  of  the  Swedish  Banking and Financing Business Act (2004:297)  (Sw.  Lag  (2004:297)  om 
bank- och finansieringsrörelse). If FI imposes a remedial injunction or a prohibition, it may also impose a penalty of a 
fine,  see  chapter  15,  section  20,  of  the  Swedish  Banking and Financing Business Act (2004:297)  (Sw.  Lag 
(2004:297) om bank- och finansieringsrörelse). 
Chapter  15,  section  15,  of  the  Swedish  Banking and Financing Business Act (2004:297)  (Sw.  Lag  (2004:297)  om 
bank- och finansieringsrörelse). 
Legislative proposal (2019/20:23) on the requirement for credit institutions to provide cash services, p. 45 (Sw. Prop. 
2019/20:23 om skyldighet för kreditinstitut att tillhandahålla kontanttjänster). 
Consultation  response  of  Sveriges  Riksbank  (2018-10-07)  on  the  Swedish  Government  Official  Report  2018:42 
Safeguarded access to cash, p. 4. 

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payment.  Such  groups  include  the  elderly,  immigrants,  the  disabled,  socially  vulnerable  citizens 

and  others  with  limited  access  to  digital  services.  These  groups  may  have  limited  access  to  the 

technology  required  for  digital  payments  and  for  such  groups  cash  may  be  the  only  means  of 
payment  available.  Further,  if  access  to  cash  continues  to  decrease  at  the  current  pace11,  the 

status  of  cash  as  a  means  of  payment  may  be  undermined.  Such  a  development  could  have  an 

exclusionary  effect  on  certain  parts  of  the  population  and  a  detrimental  effect  on  the  security, 

preparedness  and  efficiency  of  the  payment  market  in  the  event  of  a  major  disruption  in  the 

payment system. Consequently, the draft law may contribute to enhancing preparedness for such 

contingencies  by  ensuring  that  cash  is  a  functional  alternative  to  electronic  payments.  Lastly, 

according  to  the  explanatory  materials  accompanying  the  draft  law,  it  is  crucial  from  a  socio-

economic  perspective  that  the  payment  system  is  efficient,  accessible  and  robust  in  the  event  of 

malfunctions. 

2.   General observations  

2.1  The ECB understands that electronic payment instruments are increasingly used as the preferred 

method  of  payment  in  Sweden,  while  the  use  of  cash  is  declining.  Nevertheless,  cash  is  a  well 

established means of payment providing for immediate settlement of debts and direct control over 

the  payer’s  spending.  Furthermore,  the  ability  to  pay  in  cash  remains  particularly  important  for 

certain groups in society that, for various legitimate reasons, prefer to use cash rather than other 

means  of  payment,  or  who  are  unable  to  use  digital  technology.  Additionally,  cash  payments 

facilitate  the  inclusion  of  the  entire  population  in  the  economy  by  allowing  it  to  settle  any  kind  of 
financial transaction in this way12. Further, the number of SEK banknotes in circulation in Sweden 

has increased since 2017 and while the rate of identity theft and card fraud continues to rise, it is 
still  among  the  lowest  in  Europe13.  The  ECB  notes  that  cash  could  play  an  important  role  in  the 

event  of  a  disturbance  in  the  payment  systems,  even  though  cash  machines  and  other  service 

points  may  also  be  affected  as  these  are  dependent  on  interaction  with  the  account  holding 

institutions. 

2.2  Notwithstanding  that  the  ECB  holds  a  positive  view  of  further  innovation  and  development  in  the 

field of electronic payment instruments, the ECB also welcomes the core objectives of the draft law, 

namely to facilitate the continued use of cash in Swedish society by ensuring an adequate level of 

access to cash services throughout Sweden. 

2.3  The  ECB  considers  it  important  that  all  Member  States,  including  non-euro  area  Member  States, 

take  appropriate  measures  to  ensure  that  credit  institutions  and  branches  operating  within  their 

11  

12  

13  

Cash  withdrawals  from  cash  machines  reduced  from  SEK  270  billion  in  2006  to  SEK  130  billion  in  2017. 
Cash payments at POS decreasing from 40% in 2010 to 15% in 2016. 
Legislative proposal (2019/20:23) on the requirement for credit institutions to provide cash services, p. 45 (Sw. Prop. 
2019/20:23  om  skyldighet  för  kreditinstitut  att  tillhandahålla  kontanttjänster).,  p.  31.  See  Opinion  CON/2017/8, 
Opinion  CON  2017/40,  and  Opinion  CON/2019/4.  All  ECB  opinions  are  published  on  the  ECB’s  website  at 
www.ecb.europa. 
See  p.  24  of  Sveriges  Riksbank’s  report  Payments 
in  Sweden  of  7  November  2019,  available  at 
https://www.riksbank.se/payments-in-sweden-2019, and Sveriges Riksbank’s statistics on notes and coins, available 
at https://www.riksbank.se/en-gb/statistics/payments-notes-and-coins/notes-and-coins/. 

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territories  provide  adequate  access  to  cash  services,  in  order  to  facilitate  the  continued  use  of 

cash. 

2.4  Finally,  the  ECB  would  welcome  a  clarification  regarding  the  possibilities  for  interventions  and 

sanctions  that  the  home  supervisory  authority  would  have  if  a  branch  of  a  foreign  EEA  credit 

institution were in breach of the draft law. 

This opinion will be published on the ECB’s website.  

Done at Frankfurt am Main, 26 November 2019. 

[signed] 

The President of the ECB 

Christine LAGARDE 

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