Sweden en route cashless?
1990 – 2014 true story
Jan-Olof Brunila / Swedbank Group Cards 2015-04-01
© Swedbank
Electronic payments pre the dot com boom
•
Situation 1990
Card payments at POS
100 mill payments
ATM withdrawals
+ 500 million
OTC cash
endemic
Debit cards were about debit and ATM cash access strategy
OTC cash cost avoidance major driver
POS was about T/E cards and up-scale spending
Bill payments
Since 1970ies on paper “giro-service” mailed to one of two service centers (banks and post)
Direct debit started in the 1980ies – not a big deal, mostly for “subscription” type payments
Except merchant shopping payments most transactions were already semi-electronic
Everybody had a bank account + payment tools since 1960ies
Everybody got a domestic debit card in the early 1990ies
© Swedbank
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Electronic payments infrastructure in Sweden 2014
•
Card holding
Debit cards 99% (all global) 7 yrs – 80 yrs
Credit cards 30%
•
Mobile phones 99% of the population
•
3 G reach – 100% of the country
•
4 G reach 95% of the country
•
Broadband at home 85% of the homes in Sweden for rapid internet usage
•
Internet banking usage +90% of households
•
Internet banking overtaken by “mobile banking” in trx numbers
© Swedbank
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Sweden Card payments facts 2014
•
Population
9,9 million
•
Number of payment cards
Of which bank issued
11 million debit and 4 million credit
21 million
15 million
•
Number of POS transactions
2,6 billion
(Of which on bank issued cards
2,4 billion)
Annual POS growth rate 11 % (bank cards)
Number of POS devices
+200 000
POS card payment rate 80 %
•
•
•
•
•
Number of ATM:s (bankowned)
Number of ATM transactions
Annual shrink rate
1 800
0,3 billion
-8%
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© Swedbank
Cash amount SEK
(right scale)
% of GDP
(left scale)
Development of cash in circulation - Sweden
12%
120 000
10%
100 000
8%
80 000
6%
60 000
4%
40 000
2%
20 000
0%
0
Remaining cash usage: P2P and small mom/pop stores and tax evaders
Source: SCB – Swedish Statistical Authotity
© Swedbank
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Swish - remaining cash pockets in harvesting
• Person to Person
Swish smart phone real time payment
5 banks established it in 2012 – now 8 banks on boards = 95% market reach
Send monies real time to another consumer with his mob no as proxy
Strong authentication = mobile Bank ID
• Expanded into small merchants in 2014
Mobile sales situations
Seasonal stores – no POS device
Charities
Some 10 000 “corporate” acceptors
Today: + 1 million trx / month – rapid growth
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© Swedbank
Electronic payments major indirect advantage
Higher share of electronic payments contribute to tax financed needs
Black economy / number of electronic payments
Source: ECB
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© Swedbank
Will Sweden become cashless in the next few years?
• No: Cash has advantages:
3 000 years old user interface
No audit trail - supports the black market
Supported by the government – politicians will not yield control
• What about cash future in Sweden?
Will continue to shrink to 5% of merchant usage and 10% of the P2P usage
Becomes more difficult to access – ATM device numbers go down
Becomes more expensive to handle
Many people will become cash free
Most bank branches (80%) are already cash free - in 2020 all will be
Many merchants already demand electronic payments – this will increase
Government will likely put in measures to protect cash from dying
The question: who will pay for diminishing cash: users or tax payers?
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© Swedbank