Market Trends of Sweden Payments Industry
This section covers the major market trends shaping the Sweden Payments Market according to our research experts:
Retail is expected to grow significantly in the country
- The Swedish market for payment services is vital to the country's economy and society. The Retail Payments Council aims to contribute to economically efficient production and the use of safe, efficient, and accessible appropriate payment services in markets characterized by equal competition and balanced regulation. The Retail Payments Council supports a comprehensive review of central payment issues from a producer, consumer, and regulatory perspective.
- Development towards a cashless society is also being driven by fintech and financial technology. Many internationally renowned fintech companies have been established in Sweden. For instance, Trustly, a company that develops cardless payment solutions, is a platform that provides digital account-to-account payments. This means that people can pay for their online purchases directly from their bank accounts.
- Further, Sweden is widely regarded as the most cashless society globally. Many shops, museums, and restaurants only accept card or mobile payments. Most terminals in stores support contactless card payments. All major credit cards such as American Express are accepted for the bank, hotels, shops, restaurants, taxis, car rental, plane, sea, train tickets, and more retail businesses throughout Sweden.
- In March 2021, Nordic-based payment service provider Avarda picked one of the European banking players, Aiia, a Mastercard enterprise, to encourage available banking payments through its white-label payment solutions for many retailers and merchants. Powered by Mastercard's global open banking platform, Avarda provides online shoppers with a more hassle-free checkout experience.
- The future of banking appears to be quite high-tech, with a strong emphasis on artificial intelligence. Fintech firms like Tink and Rocker are also thriving, with more start-ups on the way. Swish and banking apps are also continually changing, with updates such as simpler and integrated services aimed at moving the country closer to a cashless society. This takes the use of e-commerce and mobile payments in the country.
Understand The Key Trends Shaping This Market
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Increasing acceptance of e-commerce and digital payments is driving the market
- Sweden, a Scandinavian country with just over 10 million, has long been a good example of citizens' digital literacy, wealth, and social responsibility. Sweden has a high e-commerce penetration rate of 73% of the country by 2024, e-commerce penetration rates are projected, and there is still room for growth.
- Given Sweden's technology adoption, it's no wonder that consumers are incorporating FinTech into their daily lives and driving the development of e-commerce in Sweden. As a result, companies such as Swish and Klarna have emerged in this market. The country's online payments services also include Apple pay, Paypal, and more. Even Riksbank, the central bank of Sweden, has begun to consider launching the digital currency e-Krona.
- Further, most people who shop online use cards, but bill payments are just as expected. Today, over 20% use Swish, and just as many people use direct bank payments via online banking. In July 2020, the Consumer Credit Act was amended to make credit shopping less attractive. This change means that if non-credit payment methods are available for online shopping, they should be displayed before the credit options. Swish reports that the number of merchants participating in Swish has increased since the decision to amend the Consumer Credit Act became official.
- Also, companies are focusing on collaborations and innovations to expand their business in the country. For instance, in May 2022, Swedish FinTech startup Juni selected B4B Payments, a UK payments solution provider, to provide innovative financial services to its e-commerce business. It is offered as part of B4B's new service to help FinTech startups expand their products more quickly.
- The complex challenges posed by Sweden's cashless transition by 2023 is an achievable goal. Sweden has repeatedly demonstrated its ability to secure the future of the payment ecosystem by investing in solid foundations and infrastructure, from the adoption of electronic identities to the placement of digital payment platforms. The country's innovations led to changes in consumer behavior and created space for private companies to power some of the world's most advanced fintech products.
