Payments Snapshot in Sweden: Coronavirus (COVID-19) Sector Impact

Payments Snapshot in Sweden: Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

The government estimates a decline in the country’s GDP of 4% in 2020 and unemployment to rise to 9%. A slowdown in economic activities and the falling employment rate will lead the country’s economy into a recession, which will impact the payments industry.

In response to the economic fallout of the COVID-19 outbreak, the Swedish government announced a SEK300bn ($32.1bn) stimulus package on March 16, 2020. The package includes temporary lay-off provisions that allow employers to reduce their employees’ working hours but still pay up to 90% of their usual salary, capped at SEK44,000 ($4,710.27) per month. Under this, the government contributes up to 75% of the wage costs for the reduced work hours. As part of the package, companies are also allowed to defer their VAT and other tax payments for up to 12 months.

This report focuses on the impact of the Coronavirus outbreak on both the economyand the cards and payments industry in Sweden. Based on our proprietary datasets, the snapshotprovides a detailed comparison between pre-COVID-19 forecasts andrevised forecasts of total payment card, debit card, and credit and charge card transactions by value and volume. It also offers information on measures taken by the government to combat Coronavirus.

Scope

- The coronavirus pandemic is expected to have a significant impact on the country’s tourism and travel industry due to the resulting travel restrictions as well as the slump in consumer spending. According to GlobalData’s 2019 Banking and Payments Survey, travel and accommodation accounted for over 21% of the country’s total debit card transaction value.
- Contactless technology in Sweden is already growing at a faster pace, with Swedes increasingly making contactless card payments at shops, restaurants, cafés, and kiosks. As a result of the current scenario, the use of contactless cards for payments is expected to become even more popular among Swedish consumers. According to Nets, a payment services provider, 48% of the total card payments in the country were contactless at the beginning of April 2020, compared to 42% at the beginning of the year.
- The pandemic is also seen to push the adoption of digital payments among Swedish merchants. Swish, a popular payment solution in Sweden, observed an increase in transactions at merchants by 33.3% and 93% in terms of volume and value respectively in March 2020, compared to the same period in the previous year.

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the Swedish payment industry.
- Understand the key market trends, challenges, and opportunities in the Swedish cards and payments industry.
- Receive a comprehensive insight into payments market in Sweden.