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Real-time payments in Sweden: one million users and still counting

bankgirotReal time is real time, according to Bankgirot, the clearinghouse responsible for the introduction of a real-time payment platform in Sweden. ‘Real-time payment’ refers to the money leaving one account in real time, appearing on the other account at the same time, being settled in real time, and then processed on the account statement in real time. The first service to be connected to the real-time payment platform was Swish, an app owned by six Swedish banks, allowing consumers to make real-time payments using their mobile phone. The app is popular, with one million users and still counting. Carina Olsson, CIO of Bankgirot, elaborates on the importance and future of real-time payments. 

Why is paying in real time so important?

Sweden’s central bank, the Riksbank, has declared its intention for Sweden to be a cashless society by 2020. Real-time payments are one way of achieving this goal. Equally important is the increasing pace of society in general. Payments have to keep up with that pace. The new generation wants to receive the money in their account straight away. For banks, real-time payments are an important service when it comes to preserving customer satisfaction. They are also vital in reducing costs, as cash is expensive for banks.

Swish only came onto the market in November 2012, and already one million people have downloaded the app. Why has it become so popular so quickly? 

With real-time payments, we have delivered a solution for small commerce between individuals. For sellers, they eliminate the issue of having to sell their goods first and then wait for the money, while purchasers no longer have to pay first and worry about when the goods will be delivered. Everything is done at the same time. The service is not limited to small amounts, either. For example, I sold my car using the Swish application.

Which new services do you expect will connect to Swish in the near future?

After the summer, Swish will be introducing a consumer-to-business solution for real-time payments. This new solution will enable consumers to make payments to small businesses and organisations, like charity organisations. The real-time payment platform will be available 24/7/365, and with its generic setup it will be able to provide access across various bank payment channels, such as internet, mobile and telephone banking, and at bank branches.

Are you developing real-time payment services for business-to-business as well?

I’m confident new services will be developed in the future, as the advantages are numerous. However, as yet no specific plans have been made for B2B. We have to keep in mind the higher complexity of systems and the major differences between ERP (enterprise resource planning) systems, which require a more complex solution.

The UK already has a real-time payment platform. Other countries are considering it. How about developing a European platform?

Rules and regulation differ, systems differ, and even the wishes of consumers and businesses can vary from country to country. It would be too difficult an undertaking. I think it would be more realistic for countries to develop their own platform and then connect to each other’s systems.

About Bankgirot

Bankgirot is the only clearinghouse for mass payments in Sweden. It has a central role in the Swedish payment infrastructure. Every hour, more than 125,000 transactions flow between payers and payees. Bankgirot’s operations were founded in 1959, and today the company employs approximately 240 people. Bankgirot is owned by SEB, Swedbank, Handelsbanken, Nordea, Danske Bank, Skandiabanken and Länsförsäkringar Bank.

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