Four important focus areas for the retail payment market
Date
05/06/2013
At present, Sweden has one of the most efficient retail payment markets in the world. This is largely because the market participants have taken advantage of new technology and the regulatory framework supports a good balance of competition and cooperation without closing the market to new participants. Cards are used frequently and cash seldom. The pace of development is fast. New payment services are being launched on the market and new participants are becoming established. In the study The Swedish retail payment market, the Riksbank describes four focus areas. It is important that the affected Swedish authorities and market participants closely monitor these areas and that they develop cooperation and dialogue to enable them to meet the changes and demands to which this development ultimately may lead.
Four focus areas
Cash
Cash usage continues to decline. Nevertheless, the Riksbank deems that cash will remain as a means of payment over the foreseeable future, even if it will continue to decrease in importance. This applies regardless of the future development of the retail payment market. If cash usage becomes very restricted, in the long term, the status of cash as legal tender may start to be questioned, with the result that, in a crisis, it may not be possible to use cash as much as desired.
The authorities should therefore monitor developments, review the role of cash as legal tender and investigate how payments in the retail trade can be made in a crisis situation.
The market participants should investigate how to meet an increased demand for cash from the general public and make it easier for the retail trade to accept cash.
Competition
Competition in the retail payment market must be promoted. It is the authorities' task to ensure that this takes place.
Technological developments
Technological developments are a driving force behind the ongoing structural transformation of the Swedish retail payment market. Market participants and authorities together should identify and reduce technical vulnerabilities in the payment systems.
Regulatory processes on the EU level
The future regulatory framework for the retail payment market will largely be drawn up in Brussels. Swedish authorities and market participants should therefore raise their voices to ensure that all relevant aspects are considered and, if necessary, establish a Swedish position in the development of the regulations on the EU level.
