Riksbank noted that Sweden needs to modernize its infrastructure and create processes for more secure, efficient as well as accessible retail payments.
As noted in the update from Riksbank, these are payments of smaller amounts and a collective term for payments between “private individuals, companies and authorities.”
In the Riksbank study “The way forward for clearing and settlement of retail payments in Swedish kronor”, the Riksbank presents its view of how the infrastructure “needs to be modernized over the next five years.”
The research study argues that the infrastructure for “clearing (compilation and processing of payment orders) and settlement (finalization) of retail payments in Swedish kronor needs modernization.”
Major changes are under way in the Swedish retail payments market, which change conditions under which “clearing and settlement of retail payments will occur in the future.”
Operators in the Swedish retail payments market need to “adapt their systems and processes for payments.”
The future retail payments infrastructure “should be able to handle more instant payments.”
In Sweden, instant payments already account for “a large share of all retail payments but in the future more payments may also be settled instantly. One example of how to make instant payments in Sweden is by “swishing”.”
The Riksbank’s view is that the future infrastructure for retail payments will have to comply with European standards, be ready to “receive retail payments both instantly and at predetermined times, and facilitate the entry of new actors using new technologies.”
Payments should also, as far as possible, be “settled at the Riksbank; that is, in central bank money.”
As explained in the update, this is an effort to minimize risk so that the public can “maintain a high level of confidence in the Swedish payment system.”
New players, including payment and e-money institutes, should be able to apply for access to the Riksbank’s settlement system and “to the infrastructure for clearing payments.”
The infrastructure of the future should also offer a “high level of protection against money laundering, cyber-attacks and other disruptions.”
The Riksbank therefore sees a need to “modernize the infrastructure for clearing and settling retail payments in a way that accommodates these changes and meets future needs.”
According to the report, this is considered to vital in order to ensure that the payment infrastructure in Swedish kronor remains “stable and efficient in the future.”
A more modernized infrastructure also facilitates “innovation in the Swedish payment market,” the report explained.