The Nordics are known as global leaders in digital transformation, home to some of the most advanced banking infrastructure in the world that has spearheaded innovation in mobile and instant payments for decades.
In Sweden, mobile payment services provider Swish is a dominant force in the local market and one of the country’s strongest brands, with 95% of all adults in Sweden using the service — leaving merchants with no choice but to adopt the service to meet growing consumer demand.
“We have a great network effect,” Urban Höglund, Swish CEO, told PYMNTS in an interview. “We are in the system to [create] greater value for everyone and we believe the focus is domestic so we can really force adoption to a local condition. We’re not focusing on building a global network [but rather] focused on the customers’ problems.”
Being a bank-backed digital wallet has also been a key factor to build consumer trust quickly, Höglund said, a trend that aligns with recent PYMNTS data on U.K. consumers.
Read the PYMNTS Report: Making Loyalty Work For Small Businesses
The study showed that as many as 44% of U.K. consumers say they would trust banks with their personal data more than any other type of organization, such as technology companies, global payments giants like Mastercard and Visa or local merchants.
Today, thanks in part to the strong eCommerce growth triggered by the pandemic, the wallet has grown significantly and counts close to 8 million private users — out of the country’s 10 million-plus population — and some 180,000 connected businesses. In 2020, the firm hit a milestone of 2 billion Swish payments sent since the service launched in 2012.
Mobile Phone at the Center
The growing adoption of mobile phones across markets has also been a huge growth driver, helping the firm to attract users across all demographic groups.
“Older people really enjoy using Swish,” Höglund noted. “We have about 87% of people between 65 and 80 who use it because of how simple it is to use. It’s a great customer experience.”
According to Höglund, the platform was built to make it easy for micro merchants that want to embrace the solution to do so easily, providing them with a QR code to accept payments, unlike more traditional solutions that require a card terminal to fully integrate payments into their shopping journeys.
“We see the consumer wants extreme flexibility,” he said. “They want to shop everywhere; have extremely flexible deliveries and they want to manage everything from their mobile phones. So, the mobile phone, of course, is the center.”
He added that the number of customers who opt to use a self-service solution when shopping is increasing — currently at about 85% of Swedes — and as this figure grows, mobile payments will also increase, offering new opportunities for Swish to expand further.
Digital Wallet Interoperability
The European Mobile Payment Systems Association (EMPSA), a 16-member association of which Swish is a member, is working to build an interoperable European payments framework to fight off competition in the industry.
“You should be able to use Swish everywhere,” Höglund argued, adding that the regional collaboration will be essential to ensuring seamless cross-border mobile payments among users of participating payment systems.
However, he acknowledged the slow progress that has been made to build interoperability between existing digital wallets due to the various national know your customer (KYC) and anti-money laundering (AML) rules, a challenge that he said they will be able to overcome with time.
Despite its strong position in the local marketplace, remaining complacent is not an option, Höglund noted, adding that Swish is continually looking for ways to innovate the payment experience for its customers. For example, the Nordic firm recently launched its own metaverse to allow users to discover future payment solutions and customer journeys in a Swish virtual reality world.
“We have created our own metaverse where you can imitate Swish payments. It’s a really interesting way for us to follow our customers and be at the forefront of technology,” Höglund said.
Sign up here for daily updates on all of PYMNTS’ Europe, Middle East and Africa (EMEA) coverage.