Swish Swish - part 2
A dominant P2P payments network expanding into commerce
Last week I introduced the Swish payments network in Sweden as a powerful case study in mass consumer real-time payments adoption and network effects.
Swish started life in 2012 as a P2P payments network but soon expanded into commerce payments - in-store, in-person, billing and online. With no real-time payment capability in online and mobile banking in Sweden (still mostly the case today), Swish cleaned up in the P2P domain and dominates the category.
Can it do the same in the commerce domain where it is up against cards and new payment methods such as BNPL (buy-now-pay-later)1?
Swish Commerce Payments
You can view the graphs of Swish payments volumes, values and users going back to 2013 in the Swish 2024 Annual Report. These show that Swish P2P payments have reached saturation with volume and value showing growth in 2024 of just 2% each.
Swish commerce (consumer-to-business) payment growth has also slowed but is much higher at 14% volume growth and 23% value growth in 2024. This suggests Swedish consumers are starting to use Swish for higher value purchases and bill payments.
Figure 1 shows the proportion of Swish payments by volume and value that are used for commerce. By volume, commerce payments exceed P2P payments already and are likely to exceed them by value this year.
The message from Figure 1 is that Swish commerce payments are poised to become dominant in the Swish network.
Figure 1 – Commerce proportion of Swish volume and value
However, in terms of overall commerce where cards are incumbent and other methods are used such as BNPL, Swish commerce payments still have a low share of total payments volume.
Figure 2 shows the proportion of all commerce payments - Swish and card payments (debit card and credit card), that are Swish commerce payments. It has risen from zero in 2015 to around 14% today.
Figure 2 – Swish commerce proportion of all commerce payments including cards
In the past ten years, debit cards have risen also from 2.4bn payments in 2015 to 3.5bn in 20252. Credit cards rose from 441m payments to 717m payments over the same period (although, as a credit product, paying by credit card is very different to paying by Swish. The same is true of BNPL). Clearly, Swish has failed to prevent the growth in card usage, but as Figure 2 shows, it has grown at a faster rate, increasing the Swish share.
One factor holding back Swish is the customer experience at POS. When using Swish, the app is opened to capture a QR code (or enter a 123 merchant number), then the BankID app is accessed to authenticate the payment. These two actions must add at least five to ten seconds at POS compared to tap-and-pay with a card or Apple Pay/Google Pay. Until Swish is enabled with NFC, it is at disadvantage to cards at POS – and perhaps to the Vipps mobile payment wallet from Norway, a new entrant to Sweden3, which uses NFC (assuming the retailer’s POS service provider in Sweden can route Vipps NFC payments).
In 2022, the rate of increase of organisations accepting Swish decreased sharply from an average rate of 40,000 new organisations per year 2015 – 2021 to around 9,000 new organisations per year 2022 – 2024 (see the Swish 2024 report linked earlier). This is a sign that Swish is reaching saturation with retail outlets. The effect can be seen in Figure 2 with a change in the rate of growth of Swish’s commerce share from 2022 onwards.
It is more expensive for retailers to accept cards than Swish. With Swish, many smaller retailers can operate by accepting just Swish and ditching cards. This may be happening, as POS card transactions peaked in 2019 at 3.3bn transactions, reducing to 3bn in 2023 (footnote 2). The number of card POS terminals is also down about 13% since a peak in 2018. However, Swish is accepted only in Sweden and a retailer that accepts only Swish is unable to accept card payments from foreigners.
Clearly, Swish has a big hill to climb to take market share off cards.
Figures 3 shows the Swish payments per user discussed in last week’s article split into P2P payments per user and commerce payments per user. Whereas P2P payments per user have reached a plateau and may even be declining slightly, commerce payments per user are growing strongly and sailed past the P2P payments per user in 2023. If this trend continues, Swish will continue to take share off cards.
Figure 3 – Swish commerce payments and P2P payments per user
Figure 4 is the corresponding graph showing payments value per user. As observed last week, P2P payment value per user exceeds that for commerce payments, although as can be seen in the graph, only for a short while longer. The average transaction value of a P2P payment in 2024 was SEK 639 (USD 68/EUR 58) and SEK 415 (USD 44/EUR 38) for a commerce payment.
Figure 4 also shows that the annual commerce payment value per user has been growing at strong rate since 2015 with no signs of slowing. This is likely to continue, again at the expense of cards.
Figure 4 – Swish commerce and P2P payment value per user
The Swedish banks own Swish, so further growth in Swish commerce payments will erode the revenue they receive from cards. This may make them reluctant to develop Swish further – time will tell. However, Swish has been instrumental in reducing cash usage in Sweden to almost nothing and is saving the banks significant cash handling and seigniorage costs (lost interest).
Additionally, between Swish and cards, local banks have a strong hold on consumer-to-business payments in Sweden. Swish pre-dates open banking by six years and somewhat serendipitously allows the banks to neutralise the threat from third party payment services using open banking. The banks provide a real-time service through Swish but keep their online banking D+1 or same day (instead of real-time with Rix-Inst which all banks use for Swish but very few use for online banking). Therefore, most open banking APIs are non-real-time which put third party payment services using them at a disadvantage to Swish4.
Conclusion
Swish has conquered the P2P domain and is established strongly in the commerce domain. It is a slow grind taking share off cards, which Swish has been doing for ten years. There is a long way to go and at a current rates it will take probably another ten years or more even to get parity with cards. This slow grind must suit the banks by allowing card usage to continue. However, Swish (and cards) face competition from BNPL and new entrants, with the regulator keen to see more innovation and competition in Swedish payments5.
Swish needs to continue to develop to compete in commerce payments, for example by enabling NFC payments and being interoperable with other similar systems in Europe and beyond6. The Swedish banks’ appetite to keep investing in Swish and developing it will be critical to its future.
Swish has been in operation for almost 13 years and has been a major success. Further success lies ahead but the next 13 years will be much harder7.
Sweden is home to Klarna, the world’s first scale BNPL provider and one of the largest.
Finance Sweden statistics: https://www.financesweden.se/en/reports/statistics-publications/bank-statistics/. Card figures for 2024 are due for publication later in 2025 and I have had to estimate them for 2024 and 2025 using the previous trend.
Vipps has 70k Swedish users, 71k transactions 2024 - Vipps annual report 2024: https://cdn.sanity.io/media-libraries/mlTfabQiEf3g/files/30ba851869f2d9e707e70c837bb04a891f5b4cd3.pdf
Sweden has some big open banking companies such as Tink and Trustly but these are international businesses. There are no published figures I can find for open banking payments in Sweden other than a short report in 2023 from Finansinspektionen (the banking regulator) which estimates 100 - 150m payments in 2022. Without a source for this figure it is difficult to see how this volume is possible given it is roughly 12x UK volumes on a per capita basis (the UK is perhaps the most advanced open banking market in Europe). I suspect that open banking payment volumes are very low compared to Swish volumes. https://www.fi.se/contentassets/3d1d1599eff94fe4b364736b0df6ceeb/open-finance-summary.pdf
Riksbank Payments Report March 2025 - this report highlights that Riks-Inst enables innovation and competition but only two (small) Swedish banks use it for online banking and that there are too few ways to make instant payments in Sweden: https://www.riksbank.se/globalassets/media/rapporter/betalningsrapport/2025/engelsk/payments-report-2025.pdf
Swish is a member of EMPSA, the European Mobile Payment Systems Association whose vision is “to enable seamless mobile payment across Europe by providing roaming solutions among participating payment systems”.
With consolidation of similar systems in Europe becoming a trend: Vipps in Norway with MobilePay in Denmark and Finland; Wero with iDEAL in the Netherlands, PayLib in France and Payconiq in Luxembourg, it is possible that to become successful at scale in commerce payments Swish may need to merge with other European payment systems in the future.