Lars Nyberg: Cash and payments – what lies ahead? Speech by Mr Lars Nyberg, Deputy Governor of the Sveriges Riksbank, at a meeting arranged by Sparbanksakademin och Handelns tvecklingsrad, Stockholm, 5 February 2008. *  *  *  To most people the Riksbank is associated with money. This is not so surprising. We supply the country with banknotes and coins and on each note one can see the signature of the Governor of the Riksbank. But we are not just concerned about banknotes and coins, which are tools to manage payments. We are also concerned about payments in a much broader sense. This is because the Riksdag, the Swedish parliament, has decided that we shall promote a safe and efficient payment system, as one of our tasks. Quite simply, this means that we shall ensure the financial system in Sweden is constructed in such a way that people (and companies) can manage their payments in a safe manner – and, moreover, at a reasonable cost. When we speak of ”financial stability”, which we do frequently, it is essentially the means to make payments safe and efficient we are referring to. It is, of course, no coincidence that the Riksdag has given us this task: If people were unable to receive their salaries and if banks and companies were unable to make their payments this would rapidly have a major impact on society.
The most well-known e-payment company is PayPal, which is registered in Luxembourg, but which is active around the world. Almost exactly ten years ago Stefan Ingves, the current Governor of the Riksbank, held a speech on the theme “Electronic money from a central bank perspective”. He then said that “the situation today on the e-money front can, put briefly, be described as there being a lot  5  In 2006, 85 per cent of all giro transfers and other credit transfers were made electronically, the remainder were paper-based. In terms of value, 96 per cent of these transactions were made electronically. Sveriges Riksbank. 4  BIS Review 16/2008  happening at different places in the world, although a breakthrough on a broad front is still in the future”. This summary can probably said to still hold today. 6 But not all development is tied to e-money. Mobile phones are now also used to make payments. For example, we can pay our bus and underground journeys by sending a text message. A few seconds later we receive a text message back from the operator, confirming that a ticket has been purchased and that it can be shown to the driver or conductor. If one has a prepaid card the cost is drawn directly, otherwise it will be put on the telephone bill. There are shops that have begun to use smart cards.