In the wake of the one of the most astounding data breaches in the history of the digital age, questions about individual privacy and data protection are becoming more pressing. In fact, following the Facebook and Cambridge Analytica scandal, serious questions arise about the ability of private companies to safeguard user data.
A country where these fears are particularly sensitive is Sweden where the entire digital payments system is in the hands of private firms. In of itself that’s not an issue, particularly if alternatives, such as cash, exist. But in Sweden that is indeed the core of the problem: as a country on the verge of moving to cashless, questions about privacy and private ownership of payment systems are particularly relevant. Even the governor of the central bank, Stefan Ingves, wrote an opinion piece calling for a revision of the country’s payments strategy listing privacy and national security as causes of concern.
Sweden’s current digital payment system, which for the majority goes through the smartphone app Swish, is a completely private affair. Created by Sweden’s six largest banks back in 2012, Swish is now used by over 60% of the population. The app is free to download and to pay with it the person simply needs to input his/her bank account information. Payments are immediate and are frequently used to pay back friends or to split the bill at a restaurant. Swedes have a high level of trust in their government and in their institutions, but what if that trust were to falter or if a serious crisis were to strike? That’s the main question that the Swedish government is asking itself.
With the scandal that’s unfolding around Facebook and its inability to protect user data, there is cause for concern for this highly connected country. Indeed, the government has already called a meeting with Facebook, Google and Twitter to prevent any propaganda from being published prior to the September elections and to better understand how personal data is being collected and used by these internet giants. Some of Sweden’s main political parties have already been contacted by Cambridge Analytica offering their services to influence the election.
The Swedish government and the central bank will be exploring options to provide Swedes with an alternative which could include more cash – and stricter regulations to make it more accessible – or the development of a central bank-owned digital version of the Swedish krona.