Urban Höglund, CEO of Swedish instant payments app Swish discusses the service’s future, cross-border payments, and how digitalization can reshape the in-store experience.
If you live in Sweden, chances are you’ve used Swish, the instant payments app that boasts more than 8 million users in a country of 10 million people. Since banks launched the service in 2012, Swish has become the dominant mobile payment method in Sweden, with 83 percent of Swedes using the app in 2021.
“We have a great collaboration with the participating banks where Swish enhances their offering and strengthens the banks relationships with their customers,” says CEO Urban Höglund.
Every month, Swedes carry out an average of 75 million payments via Swish, which lets users make instant transfers between users’ bank accounts via their mobile phone.
“Swish is growing because we are the preferred payment method in the mobile phone,” says Höglund, who took over as Swish CEO in August 2021.
“People also feel a sense of trust and the security that comes with knowing the service is offered by their bank and that they are using money that’s actually in their accounts.”
He’s also excited by the opportunities brought by P27, which will provide the Nordics with a whole new cross-border payments infrastructure.
Banks connected to Swish are set to test the Nordic payments platform by the end of the year. And starting in 2023, P27 will process all Swish payment flows.
“P27 is on a very exciting journey that we believe will open up a number of opportunities for us in the future,” he says.
“We want to be close to the user which requires a lot of front-end development, so we need infrastructure partners like P27.”
Swish’s already steady growth received a boost during the coronavirus pandemic thanks to an increase in e-commerce. Despite the pandemic boost and being the preferred payment method for Swedes 18-55, he points out that Swish’s e-commerce market share remains around 20 percent.
“Consumers want to use Swish, but we see a gap between demand and supply here. Not all merchants offer payments via Swish today, but considering consumers’ demand for it they probably should,” he says.
Höglund is committed to closing that gap by working together with participating banks to focus on getting more merchants to offer Swish as a payment method.
“Digital shopping journeys need not be limited to e-commerce. If consumers have a mobile phone, we’d like to see them be able to use Swish for in-store purchases as well,” he explains.
Close to 320,000 businesses already use Swish, but Höglund wants to see that figure rise even further now that the pandemic is receding. Swish data from early 2022 show that Swedish shoppers are indeed returning to stores – and Höglund believes Swish has a role to play in helping retailers transform the in-store experience.
“There’s no doubt that stores are still relevant,” says Höglund.
He points to the rise in self-service checkouts as well as stores where salespeople roam the floor with devices that allow customers to pay wherever they are rather than having to wait in line. Increasingly, the online and in-store experience are merging, he says, thanks largely to mobile phones.
“Swish has the potential to be an integral part of helping retailers improve the customer journey with digitalization,” says Höglund.
In addition to courting stores and businesses in Sweden, Höglund also has an eye toward providing Swish’s services across borders.
“Our ambition is to make it possible for people to Swish to anyone, anywhere. We see a lot of potential in cross-border, P2P payments,” he explains.
Swish was a founding member of the European Mobile Payment Systems Association (EMPSA), which brings together 14 companies from across Europe with the aim of creating seamless mobile payments across the continent. The group focuses on enhancing interoperability, technical developments, and regulatory compliance.
Swish took another concrete step on the road to internationalization in February when Dutch payment company Adyen, one of the largest providers of e-commerce and point-of-sale payment solutions, signed up to be a participating bank.
The partnership allows international e-commerce providers to provide Swish as an alternative to Swedish consumers.
“We see huge demand from both local merchants and international companies to be able to offer Swish as a payment method,” said Tobias Lindh, CEO of Adyen in the Nordics & Baltics.
As Swish works with its peers across Europe and partners with international banks to grow the service, a consolidation trend in mobile payments is underway in the Nordics. Last year, mobile payment providers in Norway, Finland, and Denmark – Vipps, Pivo, and MobilePay – agreed to merge.
The deal will create one of the largest bank-owned digital wallets in the Nordics, with more than 11 million users and more than 330,000 merchants across the three countries.
Höglund views the deal as “an exciting development” and further evidence of innovation and in the Nordics payments industry.
He foresees a world offering “total flexibility” when it comes to payments, with the mobile phone at the heart of the experience.
“You’ll be able to order and pay wherever you are and however you want,” he explains.
“Payments will no longer be a separate step in the customer journey, but a seamless part of the experience – there will be flexibility, but also control.”
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