Payments Report 2024

Are payments in Sweden efficient?

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Payments consume significant resources

Published: 14 March 2024

The economic costs of payments in Sweden in 2021 are estimated at SEK 51 billion - almost 1 per cent of GDP - according to a study from the Riksbank. The economic costs have decreased over time and are in line with the costs in neighbouring countries such as Norway. The study shows that card and Swish payments have the lowest cost per payment, i.e. unit cost, of SEK 4.4. This can be seen in Figure 11. Cash has a relatively high unit cost of SEK 13.4.

Figure 11. Card and Swish payments have the lowest cost per payment

SEK per transaction, 2021.

Figure: Figure 11. Card and Swish payments have the lowest cost per payment

Note: Swish is a subset of giro transfers but is shown separately in the figure. Cards include both debit and credit cards.

Download the data from the diagram by clicking on the arrow to the right, above the diagram.

Source: Payment costs in Sweden, 2023. (2023).

There are two important factors that affect the unit cost of a payment method. Firstly, the number of payments made is of significance. When many payments are made using a particular payment method, the fixed costs, such as the costs of systems and premises, can be spread over more payments. This is called economies of scale. The fact that few people use cash today therefore explains why the unit cost of a cash payment is high and has increased compared to 2009, when the Riksbank last conducted a study of the costs of payments. Secondly, the amount of manual handling needed when someone uses a particular payment method is also important, i.e. how long it takes to make and process a payment. This is because much of the economic cost of payments consists of the time it takes to make a payment and to receive and process payments. The automation of payment processes therefore reduces economic costs.

In the study that examines the costs of payments in Sweden, the Riksbank only measures the economic costs. We do not measure or assess other societal values. For example, issues such as competition, accessibility, sustainability and the availability of multiple payment methods in the event of a crisis or war are also issues to consider if a full economic analysis of different payment methods is to be carried out.

Banks’ costs for payments

Digital payment services cost less for banks than manual payment services, including cash. Between 2009 and 2021, banks’ costs have decreased, especially the cost of cash. This has reduced the banks’ annual costs by around SEK 2.7 billion, or 80 per cent. This is partly because the use of cash has decreased and partly because the banks now let Bankomat AB operate all the banks’ ATMs. In addition, all major banks have stopped handling cash at their branches.

The unit cost of bank transfers has also decreased. This is because more bank transfers are initiated digitally instead of manually, but also because the total number of bank transfers has increased, allowing banks to spread their fixed costs over more payments. In contrast, the part of the cost associated with the processing of the bank transfer in the payment infrastructure has not decreased significantly.

The same applies to the unit cost of card payments, mainly because the number of card payments has increased and their processing has become more efficient. This is despite the fact that during the same period banks have invested in the development of contactless payments and increased their spending on fraud protection.