The Swish payment app was launched at the end of 2012. It enables people to make instant, real-time payments from their payment account to other payment accounts. Since 2012, the number of payments made via the app has increased sharply. In 2018, Swish was responsible for six per cent of all electronic payments in Sweden.
Swish payments can currently be made immediately 24 hours a day, 365 days a year, thanks to a settlement platform (Betalningar i realtid, BiR) that is jointly owned by banks. BiR is a private service and settlement is carried out in private bank money via the banks’ BiR accounts. Banks also deposit money in accounts at the Riksbank which works as a kind of guarantee for the payments made via BiR. We can therefore say that settlement in BiR takes place in private bank money backed by central bank money. In partnership with the banks, the Riksbank has developed this solution and by doing so laid the foundation for a settlement solution that minimises credit risk between participants in BiR. In the long term, a possible alternative to BiR is to settle Swish payments in central bank money on the TIPS platform.
The number of Swish payments will probably continue to grow. Until now, the growth has primarily been in person-to-person payments. But more and more companies and associations are starting to accept Swish payments. The company that runs Swish (Getswish AB) has launched new services that have expanded the area of use for the payment service from person-to-person payments to eCommerce and payments in shops. Looking forward, it is highly likely that instant payments will also be able to be initiated in other ways than with the Swish app, for example via online or mobile banking.
Instant payments are set to become increasingly common on the Swedish market and not just between private individuals or from consumer to company but also between companies and authorities. This means that it will become increasingly important to ensure that the settlement infrastructure for instant payments is efficient and can manage financial and technology-related risks. The Riksbank has made the assessment that the best solution is to use the ECB and Eurosystem platform (TIPS) to settle instant payments in SEK. This will promote efficiency as it will utilise the economies of scale inherent in a larger system while at the same time offering a competitively neutral settlement platform. Risks are simultaneously mitigated as the settlement of payments is carried out in central bank money.