5 min read

Swish: 3 Takeaways for Every Bank

Meaghan Johnson

Every bank should take note of Swish, the killer mobile payments app created in 2012 by six of Sweden’s largest banks and some smaller savings banks. The app is available across Android, iOS, and Windows operating systems and enables realtime payments to a mobile number.

[vc_row][vc_column column_width_percent="100" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/1"][vc_column_text]Every bank should take note of Swish, the killer mobile payments app created in 2012 by six of Sweden’s largest banks and some smaller savings banks. The app is available across Android, iOS, and Windows operating systems and enables realtime payments to a mobile number. Danske Bank, Handelsbanken, Länsförsäkringar, Nordea, SEB and Swedbank were the first to sign on, followed by Skandiabanken and ICA Banken. Swish is a great example of how inter-bank collaboration can change consumer behavior and help traditional banks compete with the challengers. Every bank should take note of Swish, the killer mobile payments app created in 2012 by six of Sweden’s largest banks and some smaller savings banks. The app is available across Android, iOS, and Windows operating systems and enables real time payments to a mobile number.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column column_width_percent="100" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/1"][vc_single_image media="58961" media_width_percent="100"][/vc_column][/vc_row][vc_row][vc_column column_width_percent="100" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/1"][vc_column_text]

How to make a payment

The payment page of Swish is clean and concise. Users can manually add a number or search from their contacts. The “Ny favorit” button allows customers to quickly add the recipient to their favourites list. After entering the amount (belopp) and a message (meddelande), customers click on send (betala) where they authenticate the transaction within their Bank ID app (which automatically opens). Once they enter their personal PIN in Bank ID, they are shown a confirmation page, with animation (making it more difficult to counterfit).[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column column_width_percent="100" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/1"][vc_gallery el_id="gallery-360584" isotope_mode="packery" medias="58961,55735" gutter_size="3" screen_lg="1000" screen_md="600" screen_sm="480" single_width="6" single_overlay_opacity="50" single_padding="2"][/vc_column][/vc_row][vc_row][vc_column column_width_percent="100" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/1"][vc_column_text]

Banks have actually created something great

Swish is a pretty amazing app that has gained a lot of traction. Here’s how it compares to other P2P apps, like PayM in the UK:
  • Unlike PayM, Swish is a standalone app.
  • Unlike PayM, Swish maintains a single brand supported by all the banks.
  • Like PayM, customers register and manage the service within the online and mobile banking platform of their main bank.
  • Sending a payment is not confined to Swedish numbers, but you do need a Swedish bank account.
  • The app allows users to save payees into a favourites area, facilitating quick payments. Users can add up to 10 favourites.
  • Unlike Venmo in the U.S., payments are cleared in real-time—sending money via Swish is just as fast as exchanging cash.
  • Authentication is completed via Bank ID, an electronic identification service in Sweden (also developed by the banks). The service facilitates identification and signing and is used by 6.5 million Swedes (out of 9.5 million).

Changing the way Swedes transact

Swedes seem to like Swish, too. Half of the population has adopted Swish and they make 9 million Swish payments a month. Adoption of Swish has played a significant role in shifting Sweden towards becoming the first cashless society (other factors include Swedes historically welcoming electronic payment services and a crackdown on money laundering). A study by Stockholm’s KTH Royal Institute of Technology showed that in 2015 there were less than 80 billion SEK (£6 billion) in circulation, down from 106 SEK in 2009. Widespread consumer adoption is also facilitating Swish’s entry into retail payments.

When the banks become the challenger

This entry into the retail space has been an important one. Swish offers businesses, associations, and other organisations special Swish numbers that are directly linked to their bank accounts. No more cash registers, no more card readers. As a result, it directly competes with Sweden’s own iZettle, a solution that challenges the traditional acquirers by offering an app and card reader that allows individuals and small businesses to accept card payments. Not only is Swish challenging in the POS space, it is also giving Klarna a run for its money with e-commerce payments. Online customers can select Swish as the payment method and enter their mobile number. When they open the Swish app, information about that transaction will be shown. The customer completes the payment using Bank ID. E-commerce retailers do not charge an extra fee for Swish as opposed to other payment methods.

So what can banks learn from Swish?

  • Collaboration is key. The banks spearheaded this solution, and the uniform branding has really contributed to Swish’s success. They’re in this together, so they don’t have to take on challengers, such as iZettle and Klarna, on their own.
  • Banks can change customer behaviors. It comes down to (again) collaboration and a proposition that makes banking as easy as possible for the customer.
  • Banks can disrupt the challengers. When my friends are asked if they would completely switch from their traditional bank to a startup, most would say no. They still find comfort in knowing their bank is a long-standing institution. The traditional banks need to capitalise on this feeling. They have the scale and resources to take advantage of the groundwork already laid by the challengers. They should use this to launch new digital banking and payment experiences, which so many consumers now expect.
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