Sweden has a population of roughly 10 million people. By late 2024, nearly 9 million of them were using a single mobile payment app to split restaurant bills, pay rent, buy groceries, and send money to friends in under three seconds. No bank app switch. No card network in the middle. Just a phone number, a tap, and done.
Meanwhile, in the United States, a country of 330 million with the most advanced financial sector on earth, paying someone back for lunch still requires a small negotiation: which app does the other person use? Does your bank support the same network? Will the transfer actually clear before the weekend?
The gap isn’t accidental. It reflects two fundamentally different philosophies about how a unified digital payment system should be built, and who should build it.
| Key Takeaways • Around 86% of Sweden’s population used Swish by late 2024, making it one of the world’s most widely adopted national payment systems. • Swish works because Sweden combined four critical components: central bank settlement infrastructure, universal bank integration, digital identity verification, and real-time payment rails. • The U.S. still lacks a unified payment ecosystem due to fragmented banking infrastructure, competing payment networks, and the absence of a national digital identity system. • FedNow is the closest the U.S. has come to a nationwide instant payment rail, but adoption remains limited compared to Sweden’s fully connected model. • Sweden’s BankID is the foundation that enables trusted instant payments by securely linking identities, bank accounts, and phone numbers at a national scale. |
What Makes a National Payment System Work?
Before comparing any two countries, it helps to understand what the building blocks of a truly unified payment system actually are. Not every country that has “digital payments” has a system in any meaningful sense.
A genuine national payment system requires four things working in concert.
- Central clearing is the backbone. Payments between banks need a neutral third party to settle transactions, confirm that funds exist, and act as the ultimate counterparty. In Sweden, this role is played by the Swedish Riksbank through the Swedish payment system RIX-INST, which provides real-time gross settlement and ensures money moving between any two Swedish banks clears within seconds, every hour of every day. Without that kind of central clearing layer, real-time payments can’t be universal.
- Universal bank integration means every bank in the country connects to the same rails. A payment system that only works if both parties happen to use the same two banks isn’t a national system; it’s a closed loop. Full bank integration requires either regulatory mandates or an unusually cooperative relationship between competing institutions.
- Digital identity is the piece most often overlooked in these conversations. Before a phone number can serve as a universal payment address, the system needs a way to tie that number reliably to a verified person and their bank account. Without a shared identity layer, you can’t build the trust that makes real-time irrevocable payments safe at scale.
- Real-time rails handle the actual movement of money. ACH transfers, which remain the default for most U.S. bank-to-bank transactions, were designed in the 1970s and operate in batches. Real-time rails process each transaction individually, confirm instantly, and give both parties immediate finality.
The table below shows where Sweden and the U.S. currently stand across all four requirements.
| Building Block | What It Requires | Sweden | United States |
|---|---|---|---|
| Central clearing | Central bank settlement infrastructure | Riksbank via RIX-INST | FedNow (partial; roughly 1,400 of 9,000 institutions connected) |
| Universal bank integration | All banks on common rails | All major banks connected to Swish | No mandatory standard; fragmented across RTP, FedNow, and card networks |
| Digital identity | National verified identity layer | BankID (99.9% of adults aged 18 to 67) | No national equivalent exists |
| Real-time rails | 24/7 instant settlement | RIX-INST connected to TIPS | FedNow limited reach; most participants receive only, not send |
Sweden’s Swish has all four. The U.S., in 2025, still has none of them fully in place nationally.
How Did Sweden Build Swish Into a Fully Integrated Payment Ecosystem?
Swish launched in December 2012, built by a consortium of six of Sweden’s largest banks: Swedbank, Handelsbanken, Nordea, SEB, Danske Bank, and Länsförsäkringar. From day one, it was designed as shared infrastructure, not a product any single bank would own or monetize over the others.
What Role Did the Riksbank Play in Making Swish Work?
The Swedish central bank wasn’t a passive observer. The Riksbank sat at the center of the system’s settlement architecture, providing the neutral clearing infrastructure that made cross-bank real-time transfers possible. Beginning in February 2024 and completing by March, all Swish payments migrated from Bankgirot’s system to the Riksbank’s RIX-INST, which is connected to the European Central Bank’s TIPS platform for pan-European interoperability (the ability for different national payment systems to work with each other).
That central bank involvement removed a problem that has plagued payment system development in other countries: banks competing over settlement terms. When the central bank handles settlement, no individual bank holds leverage over the infrastructure.
How Does BankID Create the Identity Layer Swish Needs?
Swish couldn’t exist without BankID. Launched in 2003 by a consortium of Swedish banks, BankID is a national digital identity system that verifies who you are when you access financial services, government portals, medical records, and hundreds of other services.
By 2024, BankID had 8.6 million unique users. Among Swedes aged 18 to 67, the adoption rate reached 99.9%, according to BankID’s own published statistics. The system was used 7.6 billion times that year across roughly 7,500 connected services.
When a user sets up Swish, they authenticate through BankID. That authentication creates a verified link between their phone number, their identity, and their bank account. This is what makes phone-number-based payments trustworthy enough to be irrevocable. Both sender and receiver are verified people with real accounts.
Why Does Swish Use a Phone Number as a Universal Payment Address?
The user experience built on top of this infrastructure is deliberately simple. To send money, you enter a phone number and an amount. That’s it.
A typical transaction takes around ten seconds from start to finish: open the app, type the recipient’s number, enter the amount, authenticate with a fingerprint or face scan via BankID, and tap send. The recipient gets a push notification confirming receipt within two to three seconds. No login to a separate banking app. No waiting period. No “pending” status.
There’s no IBAN to look up. No routing number. No “which app do they use” conversation. Because every Swedish bank connects to the same system and every verified user has a linked phone number, that number becomes a universal payment address across the entire country.
How Many People Use Swish and How Fast Has It Grown?
The growth since 2012 has been hard to argue with. The system started with around 700,000 users in its first full year of operation. It reached 8 million by July 2022, and by late 2024 had approximately 9 million private users, representing about 86% of Sweden’s total population.
In 2024, Swish processed roughly 1.1 billion transactions totaling approximately SEK 560 billion (around $60 billion USD). In May 2025, the platform exceeded 100 million transactions in a single month for the first time, according to data published by Getswish AB.
The speed of each transaction is a core part of why adoption reached these levels. Settlements complete within seconds. That performance holds across the full range of commercial contexts where Swish is accepted, from grocery checkouts to digital services. Merchants operating in high-volume environments, including online gaming platforms, have published independent benchmarks of Swish transaction speed consistently showing confirmation times under five seconds, regardless of transaction size.
Cash usage in Sweden has collapsed alongside Swish’s rise. By 2023, cash accounted for less than 9% of all transactions in Sweden. Sweden now ranks among the most cashless economies in the world, and Swish is the primary reason.
Why Does the U.S. Payment System Remain Fragmented?
The U.S. payment landscape didn’t fail to build a unified system because of a lack of technology. The infrastructure exists. What’s missing is the structure and incentive alignment that made Sweden’s approach work.
Why Did U.S. Payments Build Around Card Networks?
American consumer payments evolved around card networks, primarily Visa and Mastercard, which operate as private intermediaries between banks and merchants. These networks are profitable, deeply embedded in merchant relationships, and backed by issuing banks with no financial incentive to replace them.
Issuing banks earn interchange fees on every card transaction, a revenue stream that instant account-to-account transfers would largely bypass. Any national payment system in the U.S. must compete not just with technical alternatives but with decades of card-network economics. The broader evolution of online payment technologies in the U.S. has been shaped by those competing incentives at every stage.
What Is the Difference Between ACH and Real-Time Payment Rails?
The Automated Clearing House (ACH) network, which processes most U.S. bank-to-bank transfers, was built in the early 1970s. It operates in batches, meaning transactions are grouped and settled at fixed intervals rather than processed individually in real time. Even “same-day ACH,” introduced in 2016, often takes hours.
The private sector created an alternative. The Clearing House launched its RTP (Real-Time Payments) network in 2017. But RTP is owned by large banks, and smaller institutions, credit unions, and community banks have been slower to connect, partly out of concern about giving large bank-owned infrastructure control over national payment rails.
Why Do U.S. Payment Apps Create More Fragmentation Than Unity?
For consumers, the visible symptom of all this is an ecosystem of incompatible apps. With online payments now handling trillions of transactions globally, the demand for fast digital transfers clearly exists. The infrastructure to deliver them universally does not.
Consider a freelancer trying to get paid quickly by a new client. Do they both use Zelle? Does the client’s bank participate? If not, the money may not clear until the next business day, or longer over a weekend. The freelancer can ask for Venmo instead, but Venmo runs on ACH rails, so the funds still won’t be instant unless someone pays for an expedited transfer. The client’s company might prefer a direct bank transfer, which routes through ACH and takes one to three days. In Sweden, none of this negotiation exists. You send a phone number; the money arrives in seconds.
| App | Operator | Underlying Rails | Instant Settlement | Bank Coverage | Identity Layer |
|---|---|---|---|---|---|
| Zelle | Bank consortium | Direct bank integration | Yes | Participating banks only | Bank login |
| Venmo | PayPal | ACH | No (fee required) | Most U.S. banks | PayPal account |
| Cash App | Block | ACH / debit card | No (fee required) | Most U.S. banks | Cash App account |
| Apple Pay | Apple | Card networks / ACH | No | Linked card or bank | Apple ID |
| FedNow | Federal Reserve | Federal Reserve | Yes | 1,400+ institutions | Bank login |
There’s no common addressing system. No phone-number-to-account linkage that works across all banks. And critically, no shared verification layer confirming who’s on either side of the transaction. The result is payment fragmentation that no single app has been able to resolve.
Why Do U.S. Banks Compete Instead of Cooperate on Payments?
Sweden’s banks built Swish together because they were responding to a common threat: the possibility that telecom companies would build payment systems on top of mobile phone infrastructure, cutting banks out of payments entirely. That external pressure produced a level of inter-bank cooperation that has almost no equivalent in the U.S. market.
American banking is more fragmented by design. There are over 9,000 banks and credit unions across the country, many of them regional or community institutions with limited technology budgets. The large banks that could fund shared infrastructure have historically preferred to build competing proprietary systems rather than collaborate on neutral rails.
What Is the Missing Piece the U.S. Payment System Needs?
The single most important reason the Swish model doesn’t transfer directly to the U.S. is the absence of an identity layer equivalent to BankID.
What Does BankID Actually Do and Why Does It Matter?
BankID solves a problem that sounds simple but is operationally complex: it creates a trusted, verified, interoperable link between a person’s legal identity and their digital presence. Every bank in Sweden that issues BankID is vouching that this person, with this identity number, controls this credential.
Once that trust infrastructure exists, you can build real-time irrevocable payments on top of it, because you know who is sending and who is receiving. Fraud risk doesn’t disappear, but it becomes manageable at scale because every participant is verified.
Why Doesn’t the U.S. Have a National Digital Identity System?
The U.S. has no equivalent. Identity here is a patchwork of government-issued credentials (state driver’s licenses, Social Security numbers, passports) that weren’t designed for digital authentication, alongside private-sector solutions (bank login systems, Google Sign-In, Apple ID) that are platform-specific and not interoperable.
There have been attempts. The National Strategy for Trusted Identities in Cyberspace (NSTIC), signed by President Obama in April 2011, aimed to create a voluntary national digital identity ecosystem built on private-sector providers. The initiative was wound down without producing a nationally deployed identity system. Login.gov, the federal government’s shared digital identity service, covers federal agency access but has no mandate to connect to the banking sector.
The IRS, Social Security Administration, financial institutions, and state governments all use different identity verification systems. None of them talk to each other in a way that could underpin a payment network.
How Does the Lack of Digital Identity Block Real-Time Payments?
Without a shared identity layer, real-time payments carry a fraud problem that gets harder to manage as volume scales. If you can’t verify who’s on the other end of a transaction with high confidence, irrevocable instant settlement becomes dangerous. Banks respond by adding friction, delays, or transaction limits, which undermines the whole value proposition.
The connection is direct: without identity, real-time payments can’t scale nationally in a way that is both fast and trusted.
Could the U.S. Ever Build a Swish-Style System?
The harder question is whether any of these building blocks can actually come together in the U.S. The technology exists, and so does the infrastructure investment. What’s missing is a clear path through the coordination problem at the center.
Is FedNow a Real Step Toward a Unified U.S. Payment System?
The Federal Reserve launched FedNow in July 2023 with 35 participating institutions. By its second anniversary in July 2025, that number had grown to over 1,400 banks and credit unions.
That growth rate is real, though context matters. FedNow provides 24/7 instant settlement infrastructure open to any financial institution in the country, regardless of size. The Federal Reserve operates it, playing a role structurally similar to the Riksbank in Sweden’s architecture.
But the comparison has limits. FedNow has over 1,400 participants in a country with roughly 9,000 financial institutions. The Fed’s own stated goal is to reach 8,000. As of mid-2025, the majority of participating institutions are enrolled only to receive instant payments, not to send them. Sending requires more technical integration, and many smaller banks haven’t yet built that capability.
As of late 2025, Bank of America remains the most prominent major U.S. bank yet to join FedNow. Citibank, PNC, and Capital One, all previously notable holdouts, signed on during 2025, though most of the country’s roughly 9,000 financial institutions still haven’t connected. The U.S. Faster Payments Council has described instant payment capability as becoming “table stakes” in the modern economy, a signal that even industry advocates see continued non-participation as unsustainable.
What Are the Three Possible Paths to a Unified U.S. Payment System?
Three paths are plausible from here, and they lead to very different outcomes.
Scenario 1: Banks collaborate.
The major U.S. banks agree on a shared identity and payments standard, connect all their institutions to common real-time rails, and build interoperability. This is what happened in Sweden. In the U.S. context, it’s the hardest path. The incentive structure runs against it: large banks benefit from the friction that locks customers to their platforms, and there’s no single external threat significant enough to force cooperation.
Scenario 2: Big Tech builds it.
Apple, Google, or Amazon build a de facto national payment layer through the scale of their existing platforms. Apple Pay already has hundreds of millions of connected cards. One version of this future sees one or two tech platforms become the universal payment address book, with banks relegated to underlying account infrastructure. It solves the user experience problem but creates new concerns about private-sector control of national financial infrastructure.
Scenario 3: Government drives digital ID and payments together.
Congress mandates a national digital identity standard, built on open infrastructure, that financial institutions are required to connect to. FedNow becomes the mandatory real-time settlement rail. Together, those two steps could replicate the architecture that made Swish possible. Other regions have shown that policy-driven coordination can shift payment behavior rapidly.
The rise of mobile banking in Africa, driven by government and telecoms working in parallel, demonstrates how quickly adoption accelerates when infrastructure decisions get made at a national level. In the U.S., this path requires political will that hasn’t yet materialized, and meaningful privacy and civil liberties questions about a national digital identity system would need to be resolved first.
None of these scenarios is inevitable. The U.S. may continue on its current trajectory: FedNow grows slowly, card networks retain dominance, apps remain fragmented, and the gap between what American consumers experience and what Swedish consumers take for granted widens rather than narrows.
Final Words: What Can the U.S. Actually Learn From Swish?
It would be a mistake to look at Swish and conclude that the U.S. needs to build a better version of Venmo. Building a unified digital payment system requires the same inputs Sweden put in place: a central bank willing to operate settlement infrastructure, banks willing to compete on products rather than rails, and a national identity system that creates verified trust at every transaction.
Those inputs required specific political, regulatory, and cultural conditions in Sweden that don’t automatically transfer. But understanding them precisely is what makes it possible to ask the right question: not “how do we copy Swish?” but “which pieces of that foundation does the U.S. still need to build?”
The infrastructure for faster payments is closer than it has ever been. The identity layer remains the gap that no one in Washington has yet committed to closing.
Frequently Asked Questions
What is Swish and how does it work?
Swish is a Swedish mobile payment app launched in 2012 by major banks. Users connect their phone number to a bank account through BankID and can instantly send money using only a phone number. By late 2024, around 9 million Swedes were using it.
Why doesn’t the U.S. have a unified digital payment system?
The U.S. lacks a national digital identity system, universal real-time payment rails, and coordinated bank infrastructure. Instead, payments are split across competing apps and networks.
What is BankID and why does it matter?
BankID is Sweden’s national digital identity system. It verifies users during every Swish transaction, making instant phone-number payments secure and trusted at scale.
What is FedNow and how does it compare to Swish?
FedNow is the Federal Reserve’s real-time payment network launched in 2023. While it enables instant payments, it lacks Swish’s national identity layer, universal phone-number linking, and widespread bank participation.
What would it take for the U.S. to build a Swish-style system?
The U.S. would need:
- A national digital identity framework
- Near-universal real-time bank connectivity
- A shared phone-number-to-bank-account system
The technology exists. The challenge is coordination between banks and government.
By Harsha Kiran
Harsha Kiran is the founder and innovator of Techjury.net. He started it as a personal passion project in 2019 to share expertise in internet marketing and experiences with gadgets and it soon turned into a full-scale tech blog with specialization in security, privacy, web dev, and cloud computing.