Dysfunctions of a deregulation: an example from the Swedish payment market

Abstract: Sweden is often predicted to become the first cash-free society in the world. The digital possibilities for payments are increasing and payments are now made easily using just a mobile phone. One of the possible reasons for this is the way people choose to and want to pay. Another possible reason is that the state is not guaranteeing the possibility to use cash as a payment method. The Swedish parliament decided to remove the law that guaranteed standard cashier service to all people in Sweden. This deregulation was done in order to let the market forces regulate the payment services in Sweden, without involvement from the state. The aim with this thesis is to find the latent dysfunctions of the deregulation of the law (2001: 1276) about standard cashier services. A latent dysfunction that was found in this study is that the state is not able to fulfil the political goal that “all people in the society should have access to basic payment services at reasonable prices”. The reason for this is that the rules about providing the basic payment service is assuming that there are private operators that want to provide these services against an economic replacement. Social norms that banks should provide payment services are still strong and have proven hard to interfere with. The research has been done using a legal dogmatic method. To understand the dysfunctions of the deregulation this thesis is explaining the effects of deregulation and market forces that are aiming at changing social norms of payments. The failure to believe too much in market forces is showing that the market is not able to accommodate solutions for the socially weak groups in the society. In addition the state is not able to provide solutions where cash is accepted to make sure that all people in the Swedish society have access to basic payment services. The decision to remove the law and to replace it with a political goal can be seen as trusting too much on the market. This has now led to new discussions to create a new law that is forcing the banks to handle cash.