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| Usage by % of Households in Sweden |
As the markets change rapidly, one important aspect is the
movement towards a cashless society. Sweden is at the forefront of
technological changes in terms of electronic money and payment systems. The
Swedish Riksbank has started a project on the feasibility of introducing
digital currency e-krona in place of the usual cash krona.
But once the population moves away from cash, will it rob
them of flexibility? Will it make them more dependent on private players and
payment systems? What roles does the central bank want to play? All these
conundrums are being studied by the central bank. Digital money, by itself, is
not something new. The Riksbank already deals with digital money with its
participant banks but not the public.
Two important factors of Swedish market are as follows:
The cash to GDP ratio is the lowest in the world
for Sweden. Most people do not use cash at all so much so that the tourists
have started complaining!
The growth of alternative payment solution
providers like Swish. Created by the Nordic banks and used by > 50% of
Swedes, this is challenging the unicorns in the field.
“Just Swish it to me” will be the familiar phrase in Sweden
when sharing bills or sending payments.
The steps are so simple in Swish – Open the landing page, enter the counterparty’s
phone number, amount and comment, Mobile BankID app opens to authenticate
payment, confirm with an option to send a text to the recipient and actual
transmission without any fee. The transfer is instant and free of charge for
private users. No wonder, the swedes have fallen in love with it. 6.5 million
users! Norway and Denmark too use similar systems called Vipps and MobilePay. Look at its amazing growth...
Given these, no wonder, the Riksbank doesn’t want to
introduce e-Krona without doing a feasibility study and its impact. It will be
worth the wait to see how the payment systems and related settlement systems
will be reconfigured.
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