Where are we heading?

In the Nordic countries, it is becoming less and less common to pay with cash. The growth of digital payment solutions is developing at an almost explosive pace, and Mats Lewan, futures researcher, predicts that even greater changes in the world of finance are in the cards.


In a contribution to a debate in February, Stefan Ingves, Governor of Sveriges Riksbank (the central bank of Sweden) warned that we are heading toward a situation where people’s means of payment are increasingly being controlled by commercial players. As a safety measure, he argues that the special position the Riksbank enjoys should be protected in law. This says quite a lot about the level of stress the traditional banking world is feeling in the face of the wave of new payment solutions appearing in the field of finance technology – FinTech.  

Mats Lewan, futures researcher and author of the book The Rise and Development of FinTech, has identified both benefits and drawbacks linked to the arrival of the private operators. There is a risk that use of hard cash in the form the Swedish krona will decline as the private operators’ control increases and we move toward a system that is increasingly less dependent on the banks. At the same time, a lot of people would probably say that user friendliness has improved.

Our payment system has remained unchanged for a remarkably long time. FinTech is turning the industry upside down.

Payment solutions of the future

According to Mats Lewan, there are all kinds of scenarios for how we will pay for goods and services in the future – but a common trait is that the spotlight will be on the user.

“Users have little interest in precisely how payment and the associated transactions are performed. All they care about is that it happens quickly.”

According to Mats Lewan, everything that makes the transaction less visible is better for the user. He believes that the actual act of payment will become a moment that will attract as little notice as possible, regardless of whether it involves ID identification or biometric solutions.

Cell phones are attracting a lot of attention at the moment, but he does not think these are the devices we will be using to make payments with in the future.

“The cell phone will have been allocated a different role in the future. The payment mechanism can be supported by any connected device – all that’s needed is identification.”

Futures researcher and author Mats Lewan. Photo: Juliana Wiklund

Cash-free can become a problem

Mats Lewan states that the question of a cash-free society is a political issue. 

As the Governor of Riksbanken pointed out in his article, Mats Lewan emphasizes the fact that it is a matter of national security. “In crisis situations where the electronic system has been knocked out, there has to be a physical system in place as a backup. Now that the world has become increasingly digital, it is essential that senior citizens, children and people without cell phones can all use public transport and make purchases in stores.

It’s a matter of thinking about everyone and taking into account the issue of security in a potential crisis situation. We have to think carefully about what a cash-free system could cost us.”

AI and machine learning are nothing new in the world of finance, but the technology has built up a bigger and stronger foothold in recent years – making it possible to automate financial decisions, for example. This can cover everything from automatic saving to tips for investing in shares and taking out loans. Mats Lewan is sure we will see even more AI in the world of finance – apps that help us keep better check on our private finances, for instance – and explains that AI is already being used to prepare personalized offers.

“In exactly the same way as Google strives to do, this is a technology that will answer your question before you ask it.”

Mats Lewan believes that financial technology is on the verge of making a change with consequences even more far-reaching than those in the transport industry. Self-driving vehicles will affect a lot of people, but not everyone has a driving license. The way we make payments and handle our money, on the other hand, is something that affects everybody. 

“Our payment system has remained unchanged for a remarkably long time. FinTech is on the point of turning the industry upside down, and may prove to be more revolutionary than many people think. Letting go of the cash system entails challenges that are tough to predict.”

Three trends in the field of payment solutions

Apps overtaking cash
According to the Sverige betalar (Sweden pays) survey conducted by Insight intelligence, the proportion of Swedes who say they have used payment apps for their cell phones for the first time has overtaken the proportion who say they use cash. Apps are preferred in situations such as buying from online markets and parking. The demographic group that has the greatest confidence in the new payment solutions, and which uses them most frequently, is women aged 16–29. Fully 43 percent state that they use payment apps every week or more frequently, compared to 33 percent of men in the same age group.

The use of credit cards is declining
It is not just in Sweden that payment apps are becoming more popular; a corresponding development can be traced throughout the Nordic region, and the cash-free society is closer to becoming a reality. Credit cards account for around 39 percent of the transfers in Sweden, but this figure is expected to drop to 25 percent in 2020, in favor of new finance technology.

Digital invoices gaining ground
The use of mobile invoices is increasing, due in no small part to the short payment times. According to Mobile Marketing Watch, the opening frequency for SMS messages is around 98 percent, while the corresponding figure for email is 20 percent. In addition, 97 percent of all SMS messages are read within four minutes.