Skingsley: Changing retail payments market

  • Date:
  • Speaker: Deputy Governor Cecilia Skingsley
  • Place: Royal Institute of Technology, Stockholm
It is positive that the market for payments is developing and can meet new payment requirements. But at the same time, this development creates new challenges The Riksbank plays an active role in the work on managing these challenges to make things easier for the various participants in the economy. These comments are made by Deputy Governor Cecilia Skingsley at a seminar at KTH Royal Institute of Technology today. In the midst of this structural transformation the Riksbank is also going to replace all Swedish banknotes and coins, which entails more short-term challenges that need to be managed.

Deputy Governor Cecilia Skingsley. Photo: Petter Karlberg.New payment methods increase the need for cooperation

Ms Skingsley notes initially that the most common payment services, such as cash and card payments are very accessible to most people. This is shown in the Riksbank's questionnaire survey of payment behaviour in Sweden. However, fewer people are using cash in favour of card payments and other new methods of payment. This can be partly explained by the fact that Sweden is a technology-friendly country. For instance, almost one in four households says they have access to some form of mobile payment service.


But there are many challenges. Ms Skingsley mentions, for instance, that the capacity of the mobile network is not always sufficient to manage temporary peaks. There is also a risk of fragmentation in the market as several payment solutions become established at the same time, which could lead to none of the solutions being generally accepted.


There are many different parties involved and who need to cooperate to resolve the problems on the retail payments market. At present, there is no suitable forum for these discussions. "The Riksbank, which is a centrally-located and independent participant, can contribute by creating a forum where the stakeholders can identify and analyse issues of common interest and, where possible, propose ways to resolve problems on the market. This is why the Riksbank sent out an invitation last week to a retail payments council," says Ms Skingsley.

New banknotes and coins introduced in 2015

At the same time, we are facing a more short-term challenge with the introduction of the new banknotes and coins, which starts in 2015, notes Ms Skingsley. This primarily entails logistical and technological challenges among the retail trade and banks.


"With regard to the cash changeover, the Riksbank has had a dialogue with the various market participants over a long period of time. For instance, the Riksbank has a constant dialogue with the banks as to how the changeover shall be managed and the banks have said that they will give their customers the help they need and contribute towards a smooth changeover," says Ms Skingsley.

Ms Skingsley also emphasised that the Riksbank will run extensive information campaigns during 2015, aimed at both market participants and the general public.


"I am convinced that we have a good basis for resolving short-term and long-term problems and frictions on the payments market. The way forward is to continue refining old technology in new versions and also to create entirely new solutions. This will give us good conditions to ensure our payment services will remain safe, efficient, accessible and cheap."


Read the whole speech: Changing retail payments market (PDF)

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