Concerns Rise Over Dominance of Bank-ID and Swish Amid Service Disruptions
Service disruptions at Bank-ID and Swish prompt calls for more competition in Sweden's digital payment market.
Key Points
- • Over 180 incidents affecting Swish's service occurred in the past year.
- • Riksbank's Elin Ritola emphasizes the need for increased competition in the Swedish payment market.
- • Both Bank-ID and Swish experienced significant downtime due to overload attacks this spring.
- • Nordea has had the most issues with Swish, experiencing 41 outages since May 2024.
The ongoing reliance on Sweden's dominant digital payment services, Bank-ID and Swish, is facing heightened scrutiny following a series of service disruptions that have raised questions about competition in the payment sector. A recent report highlighted that Swish alone grappled with over 180 service incidents in the past year, prompting calls from officials for more alternatives in the payment landscape.
Elin Ritola, head of payment analysis at Sweden's central bank, Riksbanken, emphasized the growing need for enhanced competition within the digital payment market. "The current structure, dominated by major players like Bank-ID and Swish, can lead to stagnation and reduced innovation," she stated. This concern has become more pressing after both services suffered from significant downtime due to overload attacks this spring, with Swish experiencing a nearly three-hour outage last Thursday.
These digital payment platforms serve more than 8.5 million Swedes, facilitating various transactions, including online shopping and healthcare bookings. However, the repeated failures have ignited debates about the dangers of relying on a limited number of options within the digital finance sector. According to Riksbank, while the focus on efficiency is crucial, it must not overshadow security and resilience.
In response to these challenges, Riksbanken has recently opened its central payment system to a wider array of quick payment options, previously restricted to Swish. Yet, banks appear resistant to launching new alternative services. Fintech representatives argue that consumers should have the freedom to choose from various payment options to drive competition.
The Swedish Bankers' Association has reacted to these discussions by cautioning that merely increasing competition might not resolve the persistent challenges related to cybersecurity and service reliability, as all payment services would face similar threats.
As stakeholders continue to address these systemic issues, the future of Sweden's digital payment environment remains uncertain, necessitating continuous dialogue on fostering a more competitive and secure payment ecosystem.