Snippet: Sweden has often been quick to use new technologies to power cultural and social development. Spotify, founded in Sweden in 2006, embraced streaming technology as a business model and is considered to be one of the world leaders in music distribution today.

Sweden has often been quick to use new technologies to power cultural and social development. Spotify, founded in Sweden in 2006, embraced streaming technology as a business model and is considered to be one of the world leaders in music distribution today. In the gaming world, a Swedish company named King developed the immensely popular Candy Crush app. It has since become a global leader in social gaming.

It goes without saying that innovative virtual services such as streaming music or gaming rely on accessible, convenient electronic payment systems. Perhaps that is why Swedish banks and other service providers have been so innovative in exploring cutting-edge payment alternatives.

Almost every Swede relies heavily on electronic channels for making payments. Cash transactions only made up two percent of the total value of payments in the country last year. In shops, only one in five transactions involves cash (the global average is three in four). Increasingly, businesses refuse cash; over half of the bank branches do not keep it; ATMs have vanished from less populated areas. One church in Stockholm, the capital city, says only about 15 percent of donations are made in hard currency. Parishioners mostly use their phones.

Joined forces

The shift in the direction of a cashless society was not forced by government policies. Swedes, as early adopters of new technology, have simply welcomed a more efficient and convenient means of paying for goods and services.

Of course, widespread network access helps, as do precedents going back to the 1960s, when, for example, banks collaborated in convincing workers and their employers to adopt bank transfers as a default means of payment and receiving wages. The larger retail banks in the Nordic countries joined forces in 2012 to launch a mobile payment application called Swish. It uses mobile phone numbers to enable real-time, account-to-account payments and is extremely popular. Nearly half the Swedish population uses it. (In Denmark, a similar app, MobilePay, is used by the majority of adult Danes.)

Go cashless?

Whether Sweden will become the first cash-free country in the world remains to be seen. For the time being, the government feels it has an obligation to provide a choice. The elderly are not always up to speed about the digital world and many still rely on cash in every day purchases.

Privacy concerns are also a factor, even in a region as relatively trusting as Scandinavia. Consumer and civil liberty organizations point at the loss of anonymity, which cash offers, worrying about the traceability of digital transactions. Blockchain technology may hold the answer to this issue, as it allows transactions to be registered and stored in ways that make it next to impossible to identify the parties concerned.

Finally, the rise of digital payments is an opportunity for cybercriminals. Physical bank heists and muggings may have declined but large-scale digital attacks on banking accounts and payment systems make the news on a daily basis. At Entersekt, we believe that our mobile app security and authentication technology can play an important role in mitigating this kind of risk. Our product, Transakt, already protects millions of consumers globally as they bank and shop online and through their mobile phones.

Digital innovation will continue to transform the European payments industry as more of us become digitally native participants in the electronic marketplace. In order to foster adoption, stakeholders must work at addressing consumer concerns about the safety of digital payments and sensitive personal data. If we do so, a cashless society may become a reality.

Subscribe to our blog.


Claudius van der Meulen

SVP EUROPE

Claudius manages Entersekt’s European business from our offices in the Netherlands. He’s a seasoned salesperson with two decades’ experience working in information technology at companies like Sun Microsystems and ACI Worldwide, and has been fundamental to our success in the region.

Entersekt Logo

Entersekt is an innovator of customer-centric fintech solutions. Financial services providers and other enterprises rely on our patented mobile identity system to provide both security and the best in convenient new digital experiences to their customers, irrespective of the service channel. With us, they can concentrate on their innovation roadmap, while delivering intuitive, low-friction digital experiences to their customers.