Sweden Points to the Future of Payments

e-commerce, m-commerce and contactless payment push Sweden closer to an electronic and cashless-driven economy.

New research suggests that new technologies and shifts in consumer preferences are quickly moving Sweden towards being an electronic and cashless-driven economy. The increasing market for online trade, the rise of contactless technology, and the substantial proportion of transactions taking place on mobile platforms highlight the need for the cards and payment industry to remain at the forefront of innovation. In this regard, Sweden perhaps represents the future of the industry.

Growth of e-commerce to drive cards and payments

The growing market for online trade in Sweden is one of the primary factors responsible for the expansion of the country’s cards and payments industry. This growth is attributed the low costs, convenience, promotional offers and discounts offered by online retailers, and is expected to further increase credit and debit card ownership.

Strong growth of mobile commerce to drive payments industry in Sweden

The increasing capabilities and affordability of smartphone devices, combined with an exponential rise in payment-centric apps have spurred a massive growth of m-commerce. In 2012, 43% of Swedish retail purchases were made on smartphones. Whilst this is a very high proportion, it follows the pattern of consumer’s technology use: according to estimates made by Statistics Sweden in October 2012, 60% of customers aged between 16 and 74 years who use the internet own a smartphone, whilst only 46% own a laptop.

Growth of contactless and NFC technology

Contactless and Near Field Communication (NFC) payments are being rolled out extensively across Sweden. In 2012, Scandinavian Airlines launched SAS Smart Pass Stickers to its Eurobonus Gold frequent fliers, enabling passengers to check in without traditional paper boarding passes. The stickers can also be used at self-service machines, for security, tax-free shopping and lounges.

Consumer preferences play a key role in purchasing decisions

Consumer preferences such as price, convenience and associated services play an important role in customer card choice decisions. Thus, in addition to fostering the ease and accessibility of e-commerce and m-commerce products, banks and card providers are making significant efforts to enhance product features and added benefits; these include rewards points, discounts, cashback offers, and an increasing number of card customisation options.