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MONEY

What is the one smartphone app you can’t avoid in Sweden?

In Sweden, it's only a matter of time before you'll be asked about Swish, the payment app that's used by millions of people in this increasingly cashfree society. But what is Swish, how do you start using it and why are Swedish police not too happy about it?

What is the one smartphone app you can't avoid in Sweden?
Cashless transfers have become the norm in Sweden. Photo: Fredrik Sandberg/TT

The Swedish public is increasingly shunning cash, and with the lowest cash circulation rate in the world – 1.2 percent of GDP – they overwhelmingly prefer to use card or digital payment options. 

The largest payment platform in Sweden is Swish, a phone-to-bank payment service which boasts over 7.5 million users. That's not bad in a country that only recently reached 10 million in population.

Swish is an app for mobile phones that uses phone numbers as identification for receiving and making payments. It connects your phone number to your bank account – any number is fine but you need a Swedish bank account, which keeps a lot of newcomers locked out from the system. Unlike many similar apps in other countries, such as Venmo, it clears the transactions in real-time, and is supported by most Swedish banks.

EDITOR'S PICKS:

In November 2019 alone, people in Sweden 'swished' almost 22 billion kronor in 48 million different transactions.

The app has quite a few features meant to make payments between people less of a hassle. An in-app calculator for easily splitting bills, an option to save people you regularly share payments with as favourites, and an option for quickly scanning QR-codes with the 215,000 companies that currently accept Swish.

Swish is in fact becoming so popular in Sweden that a new Swedish – and Swenglish – verb has been introduced: Jag swishar dig or “I'll swish you” is a common phrase when splitting bills.

Check the guide further down in the article for help on what you need to do to set up your own Swish account!


Cash, card or Swish? Cashless is becoming the new norm in Swedish stores. Photo: Isabell Höjman/TT

How safe is it?

It is safe to use, even in the event of a lost or stolen phone, but there have been scams involving Swish and you may need to beware of odd requests or unknown payments.

Different banks have different identification systems, codes or even touch-ID, but since you need a Mobile Bank ID in order to use Swish it is not a risk lending your phone to other people, as long as you are not too frivolous with your personal codes.

After concerns had been raised over “Swish-stalking”, stalkers making small payments in order to send messages to people, the app introduced the possibility to block incoming payments from specific phone numbers.

To the Swedish public, ease-of-use and quick inter-personal money transfers seem to be the main appeals of these kinds of services, but for international residents the hassle of setting up bank accounts can be quite a headache.

But though Swish may be safe to use, and popular, it isn't without criticism in Sweden.

Lack of oversight

Swish has recently come under flak from Swedish police as well as Financial Markets Minister Per Bolund of the Green Party, who are concerned about these services being an easy way for criminals to move money around due to companies not having to report criminal activity.


Financial Markets Minister Per Bolund has raised concerns about Swish and similar services. Photo: Janerik Henriksson/TT

According to revelations brought forth by Swedish public broadcaster SVT, Swish has been operating without a permit from the Swedish Financial Supervisory Authority (Finansinspektionen, or FI).

The CEO of Swish, Anna-Lena Wretman, told SVT that since the transactions are technically done through the regular banking system, and the banks are responsible for their regulatory obligations, it is only the banks and not Swish that should be required to have such a permit.

Swedish police have been critical about the cash transfer system and asked the justice ministry in May 2019 to tighten regulations. Their main concern is that Swish is vulnerable to being used for illegal money laundering and that there is a lack of regulatory oversight to be able to tackle criminals using Swish.

The Swedish Financial Supervisory Authority has initiated discussions with the company behind the app, Getswish AB, in order to investigate whether regulation is needed.

Criticisms aside – the public has spoken

Swish, and similar cashless systems, have rapidly overtaken cash purchases. In 2010, almost 40 percent of Swedes reported using cash in their last purchase. In 2018 that number had dropped to only about 13 percent, according to statistics from the Swedish Central Bank.

So how do you get on the same monetary playing field as your Swedish colleagues?

How to set up your own Swish account

Step 1 – Bank account

Swish is a collaboration between most Swedish banks and the Swish company. You'll need to set it up via your Swedish bank account, and this can be done online. 

Step 2 – Mobile Bank ID

A Swedish social security number (personnummer) is crucial for getting BankID, an app that allows access to your Swedish banking and can also be used for secure identification at, for example, government agencies and authorities. Even a Swedish coordination number, or samordningsnummer is not enough to be eligible for BankID, so sadly if you do not have a personnummer it's not an option for you.

BankID is a software that is downloaded to your computer, tablet or phone through your bank. Each bank has their own guide so you will have to follow the instructions from your bank in order to get started.


Foreign residents without a Swedish social security number won't be able to use Swish. Photo: Isabell Höjman/TT

For a Swish account, a Mobile BankID is needed. This means that your tablet or phone functions as the bank security token generator.

For BankID you can also use a physical card reader, but it's the mobile version you need for Swish.

Step 3 – Activate Swish on your bank account

An easily overlooked step. Before activating Swish on your phone or tablet you need to do it on your internet bank as well, it is also there you choose which bank account will be the target for transactions.

Step 4 – Download Swish and connect your phone number

When you have managed to create a Mobile BankID, and activated Swish on your bank, the rest is pretty easy. Download both the Mobile BankID and Swish apps to your phone. Start Swish and follow the instructions on screen.

And that's it. Congratulations, for better or worse you have just moved a step further towards Swedish integration.

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For members

EUROPEAN UNION

Pensions in the EU: What you need to know if you’re moving country

Have you ever wondered what to do with your private pension plan when moving to another European country?

Pensions in the EU: What you need to know if you're moving country

This question will probably have caused some headaches. Fortunately a new private pension product meant to make things easier should soon become available under a new EU regulation that came into effect this week. 

The new pan-European personal pension product (PEPP) will allow savers to take their private pension with them if they move within the European Union.

EU rules so far allowed the aggregation of state pensions and the possibility to carry across borders occupational pensions, which are paid by employers. But the market of private pensions remained fragmented.

The new product is expected to benefit especially young people, who tend to move more frequently across borders, and the self-employed, who might not be covered by other pension schemes. 

According to a survey conducted in 16 countries by Insurance Europe, the organisation representing insurers in Brussels, 38 percent of Europeans do not save for retirement, with a proportion as high as 60 percent in Finland, 57 percent in Spain, 56 percent in France and 55 percent in Italy. 

The groups least likely to have a pension plan are women (42% versus 34% of men), unemployed people (67%), self-employed and part-time workers in the private sector (38%), divorced and singles (44% and 43% respectively), and 18-35 year olds (40%).

“As a complement to public pensions, PEPP caters for the needs of today’s younger generation and allows people to better plan and make provisions for the future,” EU Commissioner for Financial Services Mairead McGuinness said on March 22nd, when new EU rules came into effect. 

The scheme will also allow savers to sign up to a personal pension plan offered by a provider based in another EU country.

Who can sign up?

Under the EU regulation, anyone can sign up to a pan-European personal pension, regardless of their nationality or employment status. 

The scheme is open to people who are employed part-time or full-time, self-employed, in any form of “modern employment”, unemployed or in education. 

The condition is that they are resident in a country of the European Union, Norway, Iceland or Liechtenstein (the European Economic Area). The PEPP will not be available outside these countries, for instance in Switzerland. 

How does it work?

PEPP providers can offer a maximum of six investment options, including a basic one that is low-risk and safeguards the amount invested. The basic PEPP is the default option. Its fees are capped at 1 percent of the accumulated capital per year.

People who move to another EU country can continue to contribute to the same PEPP. Whenever a consumer changes the country of residence, the provider will open a new sub-account for that country. If the provider cannot offer such option, savers have the right to switch provider free of charge.  

As pension products are taxed differently in each state, the applicable taxation will be that of the country of residence and possible tax incentives will only apply to the relevant sub-account. 

Savers who move residence outside the EU cannot continue saving on their PEPP, but they can resume contributions if they return. They would also need to ask advice about the consequences of the move on the way their savings are taxed. 

Pensions can then be paid out in a different location from where the product was purchased. 

Where to start?

Pan-European personal pension products can be offered by authorised banks, insurance companies, pension funds and wealth management firms. 

They are regulated products that can be sold to consumers only after being approved by supervisory authorities. 

As the legislation came into effect this week, only now eligible providers can submit the application for the authorisation of their products. National authorities have then three months to make a decision. So it will still take some time before PEPPs become available on the market. 

When this will happen, the products and their features will be listed in the public register of the European Insurance and Occupational Pensions Authority (EIOPA). 

For more information:

https://www.eiopa.europa.eu/browse/regulation-and-policy/pan-european-personal-pension-product-pepp/consumer-oriented-faqs-pan_en 

https://www.eiopa.europa.eu/browse/regulation-and-policy/pan-european-personal-pension-product-pepp_en 

This article is published in cooperation with Europe Street News, a news outlet about citizens’ rights in the EU and the UK. 

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