Sweden is one of the highest developed countries in respect to digitalization according to the Digital Evolution Index, DEI https://hbr.org/2017/07/60-countries-digital-competitiveness-indexed. However, having gained that position, Sweden has lost momentum. Is it because we have implemented all there is to implement currently? Have we lost our innovative visions? Or have Sweden reached the end of the road of technical possibilities and need new platforms that can thrust Sweden forward?

The Future of Payments

In the future, consumers do not expect to have to do payments actively. They should just happen in the background. Whether we buy something in a store or online, the payment should follow as part of the process with out demanding any activity from us. We do not want to bother with small payment as paying for parking the car (driver less or not) or charging the car while at the office or in a shopping mall. We want that to happen automatically. And besides, we may just want to pay for the exact amount of time we use the parking space. Whichever business model develops we, as consumers want a higher degree of simplicity but without loosing control over our funds.

Innovative technology is continuously developing to simplify and enhance the existing payment infrastructure and moving forward in the desired direction. The infrastructure is at large built upon bank accounts and cards. We move money between bank accounts via Bankgirot (the banks clearing channel). We use plastic debit and credit cards when we shop in store and on line and thus involve acquirers. The innovations are built upon and limited in potential by this infrastructure. For example the Payment apps or wallets most often have a card “on the inside” and Swish is built upon Bankgirot.

The Riksbanks e-crown project can be an enabler for increased momentum

The Swedish central bank, the Riksbank, is looking at developing an digital crown, the e-crown, as an addition to its physical notes and coins and besides the traditional issues to value, the Riksbank have another choice to make; either implement more of the old infrastructure or being part in developing an infrastructure that propels the society into the future of payments and further digitalization.

An e-crown based on an infrastructure built for digitalization would be able to support both human- and machine-based economies as well as integration of them both, enhancing automation significantly. -A digital crown that supports new payment technologies, not only between people, organizations and companies but also supports smart cities, smart grids and machines as we get more interconnected.

To take the next steps in digitalization, we need to think of solutions that would support automation and micropayments between devices and IoTs (Internet of Things). As Iots will have an identity (IDoT), they can share the economy of a human. This may sound a bit abstract. Think of it as that you have devices that buy power when it is the cheapest. It could be your electrical car charging the batteries or your heater in the house. Or you have solar panels installed at your smart house, from which you sell excess power to your neighbor. Do you really want to administer those small payments? Approve every one via your mobile or some other interface? No, you would like your devices negotiating prices and performing payments directly and automatically in the background on behalf of you. Our devices are supporting our everyday life and are at the same our extended wallet with some configurable autonomy.

We have most likely have been “walletizing” larger things as well. As you order your vehicle to be transported somewhere you will pay for the usage of the car which will include all additional costs the car have paid on your behalf. For example, the parking lot you used and the highway tolls. These types of payment would preferably happen in the background and are possible, as you have already identified your self when booking the vehicle as well as transferred some limited rights to the car to act on your behalf.

With the e-crown project currently assessing possible technical solutions, Sweden have a unique opportunity to create an e-crown built upon new technology, that not only supports the standard properties of sovereign money in a modern world, but becomes an infrastructure that supports authentication, peer to peer transactions, speed of transfer, and interoperability. Properties that are already highly desirable and most likely critical to enable the next leaps forward in digitalization for Sweden from were it stands today.