card products. at least in sweden, consuming out of credit is still considered to be somewhat irresponsible. in the old days of bank regulation, banks were not supposed to give credit for consumption purposes since available credit recourses should be channelled into productive investments. 3. the use of checks is negligible ( fig. 3 ). cards have increased their share of non - cash payments from less than ten per cent in 1990 to nearly 30 per cent today. the increase is partly reflected in a corresponding decrease in the share of check payments. in fact, checks have virtually disappeared from the swedish payment market. however, the rapid decrease in the use of checks can not explain the growth of the card payment market. the share of checks has never been large in sweden, since giro payments have always comprised a large share of non - cash payments. 4. cash is still the king ( fig. 4 ). given the rapid increase in the use of cards in sweden, particularly in the late 1990's, cash should have been expected to fall in importance. this, however, does not seem to have happened. the use of cash, measured as the ratio of the value of currency in circulation ( m0 ) and gdp, fell during the first half of the decade, but have been fairly constant since then, lately even increasing somewhat. in the other nordic countries the ratio of currency to gdp has been fairly stable, with the exception of norway, where it has been falling. furthermore, the level of cash to gdp is considerably lower in the other nordic countries, perhaps reflecting their more widespread use of cards. in a longer perspective, starting 1950, the use of cash in relation to gdp has been falling considerably also in sweden, from 10 down to four percentage points ( fig. 5 ). 5. cash cards have not been successful ( fig. 6 ). chip cards with e - money function may be used in transactions of low value and for acceptance at smaller points of sale. this, however, is the part of the market where cash is most appreciated. the national roll out of the so - called cash card occurred in sweden in the latter part of the 1990s. three of the four largest banks in sweden, that together comprise the lion share of the card payment market, stand behind a common technology. the introduction has not been a success. up to now, the growth in the use of the new product has been very modest and recently even negative in terms of number of transactions

terminals that accept a particular card greatly affect the utility of the user. the larger the number of payment terminals that a bank can install, the happier will be the users and the larger the share of the card payment market the bank will have. economies of scale and network effects both increase the incentives for co - operation between card issuers in establishing common standards and communication between systems. in sweden and in the other nordic countries as well, banks have a long tradition of cooperation in using common infrastructure and implementing common standards, perhaps more so than in many other regions. this is likely to have contributed to the rapid expansion of the card payment market in the nordic countries. there are some country specific differences, though. as should be expected, the number of payments per capita increases with the number of terminals installed ( fig 8 ). at least for sweden, there seems to be remaining positive network effects that may further expand the market. see for example humphrey, pulley and vesala ( 1996 ) : " cash, paper, and electronic payments : a cross - country analysis ", journal of money, credit, and banking, nov. this is an econometric study of different factors affecting the choice of payment instruments. the price coefficient had no statistical significance in this study. however the data set was poor. this result was later revised in the norwegian study : humphrey, kim and vale ( 1998 ) : realizing the gains from electronic payments : costs, pricing and payment choice, norges bank. consideration of risk risk considerations are always important in card transactions. consumers in countries where criminality is low, such as switzerland and japan ( and sweden for that matter ), tend to favour cash payments to a larger extent than in countries, where the risks of carrying large amounts of cash are higher. problems in the handling of risk are also likely to be behind the disappointing development of e - commerce. the evolution of a digital market is believed to have been partly hindered by the lack of sufficiently secure payment instruments. for card issuers and banks matters of security are crucially important. there is, as always, a trade off between risk and the cost of avoiding risk by adopting security enhancing technology. when technology becomes less costly, more of it will be used. e - commerce is likely to benefit from that development. incentives to reduce risks are important and drive the current technological developments in the market. costs for fraud are very high. moreover, these costs are increasing in most countries. although card frauds are relatively less