In 2012, six of the largest banks in Sweden started Swish, a mobile payment system that facilitates peer-to-peer payments as well as online and in-store purchases. By the end of 2023, Swish had 8.4 million users and represented a majority of Sweden’s population.

Businesses that integrate Swish payments benefit from the service’s strong security measures, real-time payment processing, and use of mobile BankID – a Swedish digital identification system.

This guide will explain how Swish works, who uses it, and how businesses can begin accepting Swish as a payment method.

What’s in this article?

• How does Swish work?
  
• Where is Swish used?
  
• Who uses Swish?
  
• Benefits of accepting Swish
  
• Swish security measures
  
• Accepting Swish as a payment method
  
• Alternatives to Swish
  

How does Swish work?

Swish allows users to send money almost instantly with their smartphones. To use this payment method, users must have a Swedish bank account and a mobile BankID. Users register for Swish with their bank and link their mobile number to their bank account. Then they download the Swish app and activate it with mobile BankID on the same device. Here’s how customers use Swish to make payments:

• In-store payments: To make an in-store payment, the customer opens the app, enters the store’s Swish number and the payment amount, and confirms the transaction with their mobile BankID. If the store offers QR code payment, the customer can scan the QR code and authorise the payment.

• Online payments: When making an online purchase, the user selects Swish as the payment option and enters their phone number. They’re redirected to the Swish app, where they can authorise the payment with their mobile BankID.

Where is Swish used?

Swish is widely used across Sweden and is currently only available to customers of participating Swedish banks. A 2023 survey conducted by Sweden’s central bank found that Swish is the second most commonly used payment method for e-commerce transactions after debit cards.

Who uses Swish?

A broad spectrum of businesses operating in Sweden use Swish, from large corporations to small local vendors. Here are the types of businesses that most commonly accept Swish:

• Retailers: Online and in-person retailers accept Swish payments for a quick checkout process.

• Restaurants: Restaurants, cafés, and food trucks use Swish for its simplicity.

• Health and wellness providers: Businesses in the health and wellness space such as gyms, fitness studios, and private clinics often accept Swish.

• Transportation: Many taxi companies and ride-hailing services take Swish payments.

• Event management: Event organisers – including those for concerts, sports events, and festivals – use Swish for ticket and merchandise payments.

• Charities and non-profits: Charities and non-profits commonly use Swish to collect donations. Nordea Bank waives Swish transaction fees for these organisations.

• Utility companies: Some utility and service companies allow bill payments through Swish.

Benefits of accepting Swish

From real-time fund processing to increased payment flexibility, accepting Swish as a payment method has several benefits for businesses in Sweden. Here are some key advantages.

• Real-time processing: Unlike with card transactions, Swish transactions land in the receiver’s account almost immediately. This provides businesses with quicker access to funds.

• Low transaction costs: Swish typically has lower transaction fees compared to credit card processing or other payment methods. This makes it a cost-effective option for small transactions.

• Better security: Swish uses bank-grade security measures, including multifactor authentication. This reduces the risk of fraudulent activities and provides peace of mind for businesses.

• Easier reconciliation: The digital nature of Swish payments makes financial reconciliation easier and reduces the potential for errors.

• More flexibility: Swish is useful for businesses that operate in temporary or mobile environments such as markets, fairs, or events where traditional payment infrastructure might not be available.

Swish security measures

Swish employs several security measures to protect its transactions. Here’s an overview of its key security features.

• Bank-level security: Because Swish is directly linked to users’ bank accounts, the service operates under the same strict security protocols as its partnered banking institutions. This ensures that all transactions are protected by high standards of financial security.

• Mobile BankID: Swish transactions require authentication through mobile BankID, a Swedish digital identification solution. Mobile BankID serves as a two-factor authentication method by requiring users to verify their identity through a PIN, fingerprint, or facial recognition before a transaction is approved.

• Transaction limits: Each bank sets its own translation limits for its customers, but the maximum amount for a Swish transaction is 150,000 Swedish krona (SEK). This adds an extra layer of protection against unauthorised or fraudulent transactions.

• End-to-end encryption: All data transmitted during a Swish transaction is encrypted using end-to-end encryption, which protects sensitive information from unauthorised access during transmission.

• Advanced fraud monitoring: Swish and its associated banks use real-time monitoring and fraud detection systems that analyse transaction patterns to identify and flag suspicious activities. This helps prevent fraud before it occurs.

• Regulation compliance: Swish operates in compliance with Swedish and European Union financial regulations such as the EU’s General Data Protection Regulation (GDPR). This compliance ensures user data is handled securely and in accordance with strict privacy laws.

Accepting Swish as a payment method

To get started with Swish payments, businesses need to set up a bank account with a Swedish bank that supports Swish for businesses and get a Swish agreement from that bank. This agreement is typically either a Swish for Merchants or Swish Business agreement, depending on the type of transactions the business processes. When signing the Swish agreement, businesses must appoint a Certificate Point of Contact (CPOC) who will sign in to the certificate manager and generate the certificate that will be installed on the business’s server. If the business is integrating Swish, it will use that certificate to connect to the Swish application programming interface (API) and integrate Swish into its website.

Businesses integrating through a payment service provider, such as Stripe, can skip many of those steps. Setting up Swish as a payment method in Stripe looks like this:

• Sign in to your Stripe account or create a new account.

• Go to the Stripe Dashboard and enable Swish as a payment method. If you use Stripe Connect, Stripe will automatically determine the most relevant payment methods to display at checkout.

• If you need to manually configure a new payment method, create a new Checkout Session and add Swish to the list of payment method types.

Alternatives to Swish

Businesses looking for mobile payment solutions in the Nordics and globally will encounter the following popular alternatives to Swish.

• Vipps: Vipps is a Norwegian mobile payment method used for peer-to-peer transfers and payments to businesses. Users can send peer-to-peer payments using the recipient’s phone number and authorise payments to businesses through the Vipps app.

• MobilePay: MobilePay is a popular mobile payment app in Denmark and Finland. As with Vipps, users can send peer-to-peer transfers to anyone with a MobilePay account using their phone number and make quick purchases by authorising one-time transactions in the MobilePay app. Vipps and MobilePay had a combined 12 million users across the Nordic region in 2023.

• Skrill: Skrill is a digital wallet used to make payments and transfer money throughout Europe. It’s commonly used by the gaming and betting industries, and it provides international reach by supporting more than 40 currencies.

• PayPal: PayPal is a global online payment platform that allows users to pay using their PayPal account balance, linked bank accounts, or credit cards. Because PayPal is used around the world, accepting these payments can expand a business’s international customer base.

• Amazon Pay: Amazon Pay is an online payment service that lets Amazon users make online purchases on other websites using the payment details saved in their Amazon account. This payment option is available to businesses in the United States, Europe, and Japan. It simplifies the checkout process by reducing the need for customers to enter their payment details.