Payments in Sweden 2019

Key drivers and trends

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Technical innovation and new players

Published: 7 November 2019

Large tech-companies abroad are experimenting with new services, for example automatic registration of customers when a product is taken from a shelf in a shop. Payment then takes place automatically when the customer leaves the shop. In addition, payments for remote purchases can also be simplified and automated, for example, by using technology for “smart” contracts. Smart contracts are small-scale software that performs an action based on what has happened beforehand, so that, for example, payment is only made once a product has been delivered. 

Payments by card in shops have become easier as a result of contactless technology, also known as Near Field Communication (NFC). Debit and credit cards equipped with NFC only need to touch the card reader. Combined with smaller purchases not requiring the input of a PIN code, this is making card payments faster and smoother. Virtually all new payment cards are equipped with contactless technology. The goal for market players is for all cards and 94 per cent of readers to be equipped with NFC by the end of 2019. The technology can also be used to pay by mobile phone in shops, although such payment solutions are relatively new and so far only used to a small extent in Sweden.

Another trend affecting how we pay is the emergence of new companies that simplify the payment process when we shop online. For example, solutions are offered whereby you can pay via your online bank or by invoice and no longer give your card details when making the purchase. It is often possible for those wishing to pay by card to register their card details enabling purchases to be made at the touch of a button.

A longer-term trend in some other countries is the entrance of large IT companies, such as Google, Apple and Facebook, into the payment market. This type of company already has large, well-established networks of customers, often on social media platforms, which can give them a competitive edge. There may also be a strong link between social media and the possibility of being able to pay friends within the network, which may lead to very rapid growth in IT company payment apps. This has happened in countries such as China with the Wechat and Alipay apps. Other examples include Apple Pay, Google Pay and Samsung Pay. In June, Facebook announced that it has plans to launch its own cryptocurrency called Libra in cooperation with a number of other companies. The intention is to link the cryptocurrency to a basket of currencies such as the dollar, euro and yen to guarantee that Libra has a stable value. This means that Facebook and other companies would supply payment services that do not use Swedish kronor (SEK), which could have consequences for Sweden if Libra becomes popular. It is already possible in certain countries to have a payment card that is linked to a cryptocurrency. When the card is used, the cryptocurrency is exchanged for the relevant national currency and the payment is made through the traditional card system.

Many new payment services are based on older technology and solutions that have been used for payments for several years. For example, mobile wallets such as Apple Pay are based on card payments. The user enters their card details into the app once and then their payment card is used automatically by the mobile app. The fact that consumers have more payment options does not therefore necessarily mean that the payment system has acquired greater redundancy and robustness. Swish is an exception, as it is based on an entirely separate solution.