E-commerce has grown rapidly in recent years. By the end of 2022, it had total sales of around SEK 136 billion – a doubling of sales volumes compared to 2017.^[2] See Handelsfakta.se, E-handelns totala försäljning och tillväxttakt [E-commerce total sales and growth rate], data collected in July 2023. This means that e-commerce turnover corresponds to around 17 per cent of total retail trade, or around 2 per cent of Sweden’s GDP.^[3] According to Svensk Handel’s 2022 profitability report, retail trade amounts to around 11 per cent of Sweden’s GDP, while Statistics Sweden (2021) reports that e-commerce accounted for around 17 per cent of GDP in 2021.

Figure 1. Sweden e-commerce turnover 2004-2022 Total Swedish e-commerce sales, SEK billion

With the rapid growth of e-commerce, different types of payment solutions have also started to be offered to consumers at online traders’ points of sale, which is to say when the consumer pays. Many online retailers in the Swedish market currently have one supplier that provides the entire store’s checkout system. This checkout solution offers consumers a variety of options to pay for their goods. See Diagram 2 for an example of what this might look like for the consumer. In broader terms, payment solutions can be divided into two categories: (i) pay now and (ii) pay later. If the consumer chooses to pay later, this means that the consumer pays after receiving the goods instead of at the time of purchase. This option represents up to 60 per cent of e-commerce sales volumes in Sweden today.^[4] The numbers vary between different suppliers.

Figure 2. Payment options in e-commerce E-commerce checkouts typically offer different payment options to either pay now or pay later.

One option for paying later that has received a lot of attention is “buy now, pay later” (BNPL). BNPL is not a standardised concept and often has slightly different meanings in different countries. Generally speaking, however, it refers to a payment option offered at e-commerce checkout and which is basically a credit, but one where the consumer does not pay any interest or fees as long as they pay on time.^[5] See, for example, information on the MoneyHelper website of the UK Money & Pensions Service. In Sweden, this is often referred to as an invoice purchase and is normally an interest-free credit that allows the consumer to pay 14–30 days after the goods have been dispatched.^[6] In the United States, for example, BNPL typically involves paying one quarter of the amount at the time of purchase and the remaining three quarters at two-week intervals over the next six weeks.