Card payments without the internet: how and why Northern Europe is preparing for scenarios of digital disconnection
In the digital economy, the stability of the payment infrastructure has become no less critical than the reliability of electricity or communication. The dependence of daily financial transactions on seamless internet and centralized systems has created a new type of vulnerability – when it is enough to break the digital link to stop payments across a city or even a country. As political tensions, military conflicts, and cyber activity by state actors in Europe have increased, attention has increased to scenarios in which payment systems may become targets or fall victim to broader attacks. In these conditions, the issue of the autonomy of settlements, as well as the introduction of digital money, goes beyond the technical debate and acquires strategic importance as an element of national security, civil stability and protection of critical infrastructure in crisis conditions.
Introduction of new card payment systems in Northern Europe and the reasons for this
One of the most important reforms in the field of daily calculations is being prepared in the seemingly calm Northern Europe – Finland, Sweden, Norway, Denmark and Estonia. Five countries are simultaneously working on the implementation of card payment systems capable of functioning without access to the Internet. The purpose of this initiative is to guarantee the possibility of carrying out financial transactions in case of temporary or complete loss of communication. But behind the technical solution hides a much more serious premise: a new reality in which the payment infrastructure has become a potential target in the event of hybrid attacks, sabotage or large-scale armed conflict.
Bank of Finland board member Tuomas Valimäki pointed out in an interview with Reuters: “There is a war going on in Europe, and around that war there are various forms of hybrid exposure and harassment, which can include disruption or disconnection.” Of course, we are talking about Russia’s war against Ukraine, which has been going on for the fourth year and is accompanied by attacks on critical infrastructure, energy systems, and telecommunications. Against the background of these threats, the possibility that the financial system of a certain region can be paralyzed without a single shot no longer seems hypothetical.
It is noteworthy that Finland, one of the most developed countries in the field of digital payments, is particularly sensitive to this problem. According to the National Central Bank, only 10% of the country’s population uses cash for daily purchases. Everything else is cards, electronic wallets, contactless payments. In such a system, even a short-term disconnection of the Internet or interference with the work of bank servers can cause “paralysis” of all spheres of activity. Pharmacies, transport, supermarkets, fuel, hospitals – everything stops if the connection between payment terminals and processing centers does not work. That is why Finland and its neighbors decided to act in advance.
The plan, which is now being implemented, involves the deployment of new-generation terminals capable of functioning offline for up to several days. The principle of operation is simple: the payment transaction is encrypted and stored locally in the terminal itself, and after the connection is restored, it is sent to the bank. This allows to ensure the continuity of basic calculations in crisis situations. At the same time, Sweden has already announced the launch date of such a system — July 1, 2026. The new format will allow buyers to pay for products, medicines or services within seven days even without access to the Internet. Similar solutions already exist in Norway and Denmark, but they are currently not widespread and are undergoing technical modernization. Estonia, which is actively investing in e-government, has also joined this regional initiative.
However, the new architecture of the payment system is not only a reaction to military threats. There is another layer of the problem: Europe’s financial dependence on foreign operators, primarily on the American giants — Visa and Mastercard. These two systems handle the majority of European card transactions. In the event of a political conflict, sanctions restriction or a unilateral decision by companies, a country or even a continent may lose control over its own money circulation. Therefore, Europe is trying to reduce its dependence on American payment systems. Against the background of these threats, Finland is preparing to launch its own instant payment system, which will allow citizens and businesses to make payments directly, without the mediation of global corporations. In 2025, it is planned to make this system available to consumers, and offline functionality will become an integral part of it. It is not only about national security, but about digital sovereignty.
Other European countries are moving in the same direction. In April 2024, the president of the European Central Bank, Christine Lagarde, said: “The EU should reduce its dependence on American and Chinese systems such as Visa, Mastercard, PayPal and Alipay by creating its own payment platform.” This initiative is supported by the creation of the Wero system, announced as early as autumn 2023 as part of the European Payments Initiative (EPI). Its task is to become a unified European alternative to existing global players.
It should be noted that in Europe, the first and most direct push to rethink risks appeared after the blow-up of the Nord Stream gas pipelines in the Baltic Sea in September 2022. The attack was not on the payment infrastructure, but it showed that underwater objects are extremely vulnerable, even in peaceful waters. The countries of the region immediately remembered that almost all international telecommunication channels – the Internet, data processing, synchronization of financial transactions – depend on underwater fiber cables. The payment system is not in the “cloud”, it is physically tied to signal transmission points, data centers, optical connection. Cutting off a country from the outside world is not a matter of science fiction, but a matter of technical executive ability and desire of the attacker. That is why Finland, Norway and Sweden conducted an analysis of communication channels, the result of which was the conclusion: even a few local damages can destroy the exchange of data between banks and retail outlets.
In parallel with this, another dynamic was developing – less visible, but no less destructive. The number of cyberattacks on the infrastructure of Northern Europe has increased since the start of the full-scale war in Ukraine. And these are no longer those attacks that leave graffiti on the library website. The target was the private sector, banking platforms, communication operators, and payment gateways. Special services directly recorded attempts to penetrate the logistics of card authorization. One of the cases in Finland concerned the deliberate overloading of the DNS infrastructure used by processing centers. These attacks were unsuccessful, but their very nature is a test of endurance. It is important that the thesis began to dominate the internal reports of state structures: a digital payment system that does not have an autonomous mode is as vulnerable as a power line without an emergency generator.
Therefore, the development of offline payments and national digital systems is the formation of a sustainable infrastructure capable of functioning in conditions of crises, attacks, blockades or force majeure. It is also an example of how the new geopolitical reality requires states, even the most stable ones, to reconsider their usual models of comfort. In a world where data and communication have become the number one resource, the ability to pay without the Internet has become not a convenience, but an element of survival.
Digital money as a new financial architecture
In the discussion about the vulnerability of the payment infrastructure, both the technical access to the network and the very form of money used for making payments are key. That is why, in parallel with the development of offline card systems capable of working without a connection to a bank, dozens of countries are developing state digital currencies as a new instrument of emission, control and financial autonomy. The basis of both solutions is the same desire: to ensure the continuity of calculations in any conditions, including complete loss of access to the Internet. The development of digital currencies and offline payments do not compete with each other, they are two parts of the same process: the reconstruction of the global payment infrastructure on new principles, with greater control, speed and resistance to external threats.
The process of displacing cash on a global scale has long gone beyond consumer convenience or the desire of banks to reduce banknote maintenance costs. In the last ten years, the transition to cashless forms of payments has become not just a trend, but a direction of state financial policy in dozens of countries. In many cases, it is accompanied by the development of national systems of instant payments, the launch of central bank digital currencies (CBDC — Central Bank Digital Currency) and the gradual dismantling of the logic of cash circulation. But behind this change are not declarations, but pragmatic economic, fiscal and geopolitical considerations, which significantly change the balance between the state, business and citizen.
The idea of CBDC central bank digital currencies has already turned from an abstract hypothesis into practice: according to the International Monetary Fund, at the beginning of 2025, more than 130 countries are at various stages of developing or testing digital currencies. And although all these initiatives are united by the desire to maintain state control over the monetary unit, the implementation models differ significantly — in terms of technology, functionality, circulation logic, and degree of privacy.
The People’s Bank of China started a pilot project back in 2020, and as of 2024, e-CNY is being used in more than 200 cities, including Beijing, Shenzhen and Shanghai. The currency has the status of a legal means of payment and works through mobile applications of state banks without the need for the Internet (via NFC and QR-offline). It is the most developed and largest project in the world. The digital yuan is a two-layer model: issued by the central bank, but distributed through commercial banks. The currency can be programmable — for example, for one-time social payments with a limited validity period or permitted goods. At the same time, the system is tied to the registration of a person, that is, there is no anonymity. This is one of the main objects of criticism – China’s digital totality is strengthened by this financial instrument.
The European Central Bank completed the research phase in October 2023 and began preparations for the launch of its pilot project. Real implementation is not expected until 2026, but the technical architecture is already defined: the digital euro will work as an additional payment instrument alongside cash. This model is also two-layered: the Central Bank issues money, and banks and financial intermediaries distribute it. The purpose of this is to guarantee the availability of public money in digital form. At the same time, the ECB promises to build in a level of privacy comparable to cash: within small amounts, transactions will not be identified. Offline functionality is also provided – the possibility of making payments even without an Internet connection (via protected microchips or NFC). But the key point is that the digital euro will not retain interest and will not replace bank deposits.
Nigeria is the first African country to introduce a national digital currency. eNaira went live in October 2021. It is fully centralized, issued by the Central State Bank, does not require intermediaries and has a single state application. Its goal is financial inclusion, that is, providing access to payments for people without bank accounts. However, despite the technical implementation, the project faces low popularity: less than 2% of the population actively uses eNaira. The reason is a lack of trust in the state and a weak digital infrastructure. But the system already supports offline calculations, and this has become a key element in case of communication failures in rural areas.
In addition, in August 2023, the Central Bank of Brazil announced the name of its digital currency, Drex. Its testing is conducted in cooperation with large banks and fintech companies. Drex is a programmable digital reality that will be used for both retail payments and automation of contracts and financing (for example, housing or agriculture). At the same time, the difference of the Brazilian model is the integration with smart contract platforms and the potential of use for asset tokenization. Brazil has said that its main goal is not just digital cash, but a new infrastructure layer for financial innovation, with government control but an open environment for technological solutions.
In turn, India launched an e₹ pilot in 2022, first in the interbank sector and later for citizens. The digital rupee is backed by state-owned banks, maintains parity with physical cash, and works offline in regions with unstable internet. Its main goal is to optimize the cost of cash circulation, reduce the dependence on cash in the rural economy and create a national alternative to mobile payment applications controlled by private companies (Paytm, Google Pay, etc.). The project is at an early stage, but the government considers it strategic, especially in the context of the transition to digital subsidies and aid.
These examples demonstrate that digital currencies are not unified technologies, but different approaches to solving specific tasks. In China, it is a means of total control. In the EU, it is a response to the dominance of the private sector and the desire to maintain payment autonomy. In the countries of the Global South, it is a way to compensate for the weakness of the banking network and reduce shadow circulation. But in all cases it is about one thing: the transition of a monetary unit from a physical form to a code that no longer needs a banknote, but at the same time leaves the right of emission, control and regulation to the state.
Ukraine is also among the countries that are preparing to introduce a national digital currency. The e-hryvnia project, first officially presented in January 2023, went beyond the concept. The National Bank of Ukraine published a White Paper, which describes in detail three possible scenarios of use: for retail circulation, for interbank settlements and for programmed payments to the population. In the first pilot phase, implemented together with the Stellar company, the issuance of the digital hryvnia on the blockchain, its distribution through virtual banks and conditional automatic payment scenarios (for example, money for specific goods or services) were tested. The NBU emphasizes that e-hryvnia will not replace cash, but should become its digital equivalent with the possibility of circulation without a bank account, through a mobile application, with the potential for offline payments in the future. Within the framework of the post-war reconstruction, this decision has not only technological, but also monetary and political significance, it allows Ukraine to integrate into the digital financial architecture of the EU, preserving the element of sovereignty.
Why the world is going digital
The first and most obvious driver of this process is the cost of maintaining cash as a physical resource. For most central banks, maintaining a cash infrastructure involves printing, logistics, collection, security, anti-counterfeiting and wear and tear costs. According to the European Central Bank, the value of one euro in cash from the time of printing to withdrawal from circulation over a five-year period averages more than 0.25 euros. At the same time, digital payment, even through the banking system, costs pennies or even less – if an instant transfer is used within the same bank or national platform.
But an even more important factor is the opacity of cash circulation. Governments and tax authorities cannot track payments that do not go through the banking system. In many countries (especially in Latin America, Eastern Europe, Africa), it is cash that still forms the basis of the “gray” economy, tax avoidance, shadow trade and salaries in envelopes. That is why states are encouraging digital payments not out of technological romanticism, but as a way to expand the fiscal base and regain control over cash flows. In Sweden, Norway, and South Korea, these mechanisms have already led to significant increases in tax revenues without raising rates.
In addition, a key factor is the state’s ability to effectively influence the circulation of money. Cash is anonymous, not managed in real time, and cannot be targeted out of the market or directed by sectors. While digital currency, especially in its central bank-issued form, allows for controlling the velocity of circulation, restricting the use of funds in certain sectors, introducing targeted subsidies, programmatic restrictions, or stimulating consumption through “expired money”. For central banks, this is a technical advantage, as well as a way to modernize monetary policy, make it more accurate, especially in a world where the traditional reduction or increase of the rate ceases to have the expected effect. Digital currencies allow you to manage the money supply, embed rules of behavior into the money itself, which is a new level of monetary regulation.
Geopolitical competition and the sovereignty of the payment infrastructure are also important factors. The payment system is not only a way to buy bread, but an element of geopolitical influence. Most international settlements in local trade today go through the infrastructure of Visa, Mastercard, SWIFT and dollar correspondent accounts. This creates a systemic dependency for countries that do not have their own payment stack.
In this context, the transition to digital currency represents an element of sovereignty, primarily in the payment plane. It allows the country to independently regulate circulation, not depend on access to foreign processing centers and create an internal infrastructure resistant to sanctions or external blocking. That is why the European Central Bank, despite internal disagreements, is promoting the concept of the digital euro as a technical but strategically justified response to the dominance of dollar and private players.
In parallel with these economic and geopolitical factors, a new argument arises — ensuring the availability of money in conditions of global turbulence. Ironically, it was the COVID-19 pandemic that gave it the impetus. When some bank branches were closed, collections were disrupted, and people switched to online ordering en masse, cashless instruments became the only form of circulation for millions. And this experience has forced governments to recognize that access to funds must be guaranteed not only as a right, but as a function of basic stability — particularly for people in rural areas, in conditions of emergency or local quarantine.
Therefore, digital currency is considered as a public service – no worse and no better than cash, but one that does not require a bank account, does not require connection to a private application, and at the same time can work without the Internet or in crisis conditions. It is this approach that forms the concept of the digital euro: not as an alternative to commercial payment services, but as a state digital cash — inclusive, universal, controlled only by the central bank.
However, it should be understood that the transition to digital forms of money is not neutral. Along with new opportunities, it brings significant changes in the structure of rights, privacy and relations between the citizen and the state. Cash was absolute in its legal status, it did not require identification, did not leave a trace, was not subject to algorithms. At the same time, digital currency is a programmable asset. And even if states claim to preserve privacy, this is a different logic: transactions can be controlled, frozen, tracked, limited in time or space.
This is a new reality in which trust in the emission center must be higher than in the previous era. Therefore, public consultations, debates and technological pilot projects are ongoing around digital currencies. But one thing is already obvious: the issue of saving cash is no longer an issue, instead there is a discussion about the form in which the state will be able to guarantee the circulation of money in the future – controlled, transparent and at the same time universal.
Therefore, the introduction of card payment systems capable of working without access to the Internet and the development of digital currencies of central banks are changing the basic logic of money circulation. Money is gradually detached from the material medium, becoming an encoding of access to meaning that can be transferred, stored, limited or revoked depending on the context. This creates technical resistance to external threats, allows you to maintain the functionality of payments in crisis conditions and increases the manageability of the settlement system.
At the same time, the usual boundary between money as a neutral instrument and money as a means of surveillance disappears. Each transaction is fixed, each electronic wallet has its own identifier, each unit of digital currency is subject to the rules laid down at the level of its issue. This changes the very concept of privacy in the economy, makes financial behavior transparent for the central bank or state regulator. That is, with the transition to autonomous and digital payment solutions, money ceases to be an object that can be controlled physically. They become access to the system, but its nature will increasingly be determined not by the user, but by the conditions set by the issuer.
Oksana Ishchenko
