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The Swedish FinTech-wonder – developing too fast?

Sweden is among the top countries in Europe when it comes to FinTech transactions per inhabitant, with Stockholm being the FinTech capital of the Nordics. By March 2023, Sweden is estimated to become the world’s first entirely cashless society.

The Swedish FinTech-wonder – developing too fast?

Swedish inhabitants are keen users of FinTech, with reportedly 461,5 transactions yearly per person (459,6 per person the US). One of the main reasons being the fact that over six million people (out of ten million) are frequent users of the mobile payment app Swish.

With these high numbers, and the trend continues to rise, it is estimated that Sweden by March 2023 will become the first entirely cashless country in the world. Swish allows people to transfer money between banks instantly and has also developed a payment solution for businesses. It has become an everyday custom to use Swish as a payment method among Swedes, but does that mean people are ready to leave cash behind for all eternity?

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Pan-Nordic payment

The high usage of online and mobile payments is also apparent in the other three Nordic countries. Thirteen million people out of the combined 27 million, are users of mobile payments like Swish in Sweden, Siirto in Finland, Vipps in Norway and MobilePay in Denmark. Eighty percent of the retail transactions in these countries are being conducted cashless, showing that the customers benefit from the convenience of online payments.

The next step towards a cashless society is the P27 initiative, a project between Swedish, Finnish, and Danish banks. The collaboration aims to create a pan-Nordic payment infrastructure among the Nordic countries. As far for other European banks, they quickly need to proceed the work with growing their online and digital payment solutions or get left behind.

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FinTech start-ups are now big players

Bank solutions aside, the Nordic countries have some active players when it comes to the field of FinTech innovation and payment models. iZettle (now part of PayPal), with their chip card readers and apps for smartphone e-commerce, was invented in Sweden. And Klarnas ”pay later” solution has not only has taken Sweden but the world by storm. The company is now being valued at five point five billion US dollars, making it the highest valued FinTech company in the world.

Another field pioneering in Sweden is the term Open Banking, where banks are opening up their systems to third parties by exposing open application programming interfaces.

Innovative and convenient, or scary and unsafe?

It is clear to say that the Nordic countries, with Sweden being the mothership, is sailing towards a future where cash no longer is king. Innovative and convenient, or scary and unsafe? Is the population ready to leave the bills behind only a few years from now? We’ll soon see – The Swedish FinTech-wonder seems to be here to stay.

Source: The Nordics: Leading the World Towards a Cashless Society, Market Commentary, report by Capgemini, and Finastra.

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