General overview of the Swedish bank payments infrastructure

Sweden has three types of push payments: giro payments – Bankgirot & PlusGirot –, account-to-account transfers (A2A), and instant payments (Swish). The local pull-based direct debit scheme is called Autogiro. Bankgirot, A2A, Swish, and Autogiro payments are managed by Bankgirocentralen (BGC), which offers automated clearing house (ACH) services. On the other hand, the PlusGirot system is managed by Nordea. All payments are settled through the Riksbanken (Swedish Central Bank) settlement services. 

Payments must be sent in SEK between accounts domiciled in Sweden to leverage domestic schemes. Hence, to access local rails as a business, you need to open a SEK account with a local bank or an international bank with a Swedish branch. Get in touch here for recommendations & introductions to banks. 

Important to highlight, the Swedish bank payments infrastructure will experience a significant overhaul in the coming years. The P27 initiative aims to align Nordic payments infrastructure with SEPA and fuel the shift to real-time payments in the region. Stay tuned for upcoming deep dives on P27.

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Giro payments to Bankgiro or PlusGiro

Giro payments flow through two clearing systems, Bankgirot, jointly owned by Swedish banks, and PlusGirot, a subsidiary of Nordea. Almost all Swedish companies have a Bankgiro number and/or a PlusGiro account. Giro payments are commonly used for business-to-business transactions and consumer-to-business invoice payments. About 90% of non-cash payments made by businesses and consumers are processed through these schemes (not including direct debits or card payments). 

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Bankgiro 

When making giro payments through Bankgirot, you must pay to a Bankgiro number. Only business accounts can have a Bankgiro number, but both consumers & businesses can make payments to Bankgiro numbers. Note that  A Bankgiro number is not a bank account but a fixed number for routing payments toward a bank account. The Bankgiro number directs payments to/from the account it connects to, which can be at any participating bank. Many Bankgiro numbers can be connected to the same account, but it is not possible to have multiple accounts connected to one Bankgiro number. A Bankgiro number is always 7-8 digits long. Example. 123-4567 or 1234-5678.

Bankgiro payments offer both structured and unstructured payment references. Structured reference has a limit of 25 digits, and unstructured reference provides more flexibility with 140 characters of free text to the beneficiary. Structured reference is called OCR in the Swedish market. It’s used for the automatic reconciliation of invoice payments. Companies can configure additional checks with their bank to ensure incoming payments have the correct OCR numbers on them. The cutoff times will vary depending on the banking partner. Transfers initiated before the cutoff arrive on the counterparty’s account the same day and one business day later if initiated after the cutoff. 

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PlusGiro

In contrast to a Bankgiro number, a PlusGiro number is an actual bank account held with Nordea. Note that only businesses can have a PlusGiro account, but both consumers & businesses can make payments to PlusGiro numbers. In practice, a PlusGiro account can be connected to a Bankgiro number. When making giro payments through PlusGiro, you must pay to a PlusGiro account. You can still pay to Bankgiro numbers from a PlusGiro account. In this case, it would be considered a Bankgiro payment. A PlusGiro number is always 2-8 digits long. Example 1-2, 12-3, 123-4, 1234567-8, etc. 

PlusGiro payments also offer both structured and unstructured payment references. Structured reference has a limit of 25 digits. Structured reference is called OCR in the Swedish market. It’s used for the automatic reconciliation of invoice payments. Companies can configure additional checks with their bank to ensure incoming payments have the correct OCR numbers on them. Unstructured reference offers more flexibility with 140 characters of free text. Nordea determines the cutoff times for the initiating party. Transfers initiated before the cutoff arrive on the counterparty’s account that same day and one business day later if initiated after the cutoff. 

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Swedish account-to-account transfer (SE_A2A)

Instead of relying on giro payments, transfers can be made directly to a creditor’s bank account via a Swedish account-to-account transfer. The Data Clearing System, managed by the Bankgirocentralen (BGC), processes A2A transfers. Given the popularity of giro payments, A2A transfers only account for a single-digit percentage of the total credit transfer volume in Sweden. Typical use cases are salary payments, pension payments, and peer-to-peer transfers. 

Payments made to a Swedish local account number (BBAN) are considered A2A transfers. The BBAN is represented by a 4-5 digit clearing number (also known as a sort code or a routing number) plus an account number. The minimum length is 11 digits, including the clearing code, and the maximum is 14 digits (with rare exceptions). Example: 1234-5678910.

Swedish account-to-account transfers only support free text unstructured remittance with a maximum of 12 characters. Most banks apply a same-day cutoff at 13:00 CET. Transfers initiated before the cutoff arrive on the counterparty’s account that same day and one business day later if initiated after the cutoff. 

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Swish

Swish is a real-time payment scheme launched in 2012 as a cooperation between the largest Swedish banks, including Danske Bank, Handelsbanken, Nordea, SEB & Swedbank. Swish payments run over the payments in real-time settlement system (BIR) managed by the BGC. Real-time payments account for a single-digit percentage of the total payments volume in Sweden. 

Swish was launched as a peer-to-peer payment service, enabling users to make instant payments. It has since introduced support for businesses to accept payments and reached 8 million users nationwide. Users can pay either by scanning a QR code, using a payment link, or using the phone number of the creditor. Similarly, businesses can use Swish to initiate payments in real-time. Its payouts API can be used to create payouts programmatically from a business account. However, Swish has yet to be widely adopted for business payments. 

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Autogiro 

Autogiro is a direct debit scheme managed by the BGC for collecting SEK payments from Swedish bank accounts. Direct debit payments are often used for collecting utility payments, loan repayments, insurance premiums, and subscriptions. Of the total Swedish payments volume, Autogiro represents a single-digit percentage. To access Autogiro, a business must configure the service and obtain a Bankgiro creditor number from the bank. 

Autogiro is a pull-based payment scheme, meaning that the creditor is given the approval to collect funds from the debtor account. Before initiating the first collection, a mandate needs to be signed by the debtor to authorize direct debit pulls from their bank account. Once the mandate has been signed, the mandate information must be forwarded to the bank by the creditor for activation. After the mandate has been activated, a business will be able to make direct debit collections against it. 

A mandate can be set to collect funds either from a Bankgiro number or a Swedish BBAN. Custom remittance information is not supported for each individual collection. Instead, the creditor configures what will be shown on the debtor account in the Autogiro agreement with their bank. It will always say AUTOGIRO and an additional 12 characters that are composed of a short name of the business and a free text field. If the business is called XXX the remittance shown to the debtor could look something like “AUTOGIRO XX XXX”.

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Autogiro timings

The process to activate the mandate that the creditor signed with a customer can take up to two business days. After, the business can initiate an Autogiro collection from their customer’s account. 

• The creditor must notify their customer about an upcoming direct debit collection at least 8 days before the intended collection date. unless 1) The customer has already approved the Autogiro payment with a purchase order 2) The creditor will collect recurring payments from the customer’s account. In the latter case, the business must notify the customer about the collection frequency and amount before the first collection. 
• The payment instructions must be sent to Bankgirot at least 1 business day before the intended collection date.
• If a payment fails due to insufficient funds, it can be retried up to 3 times spread over the next 3 business days after the collection date. Autogiro allows you to configure automatic retries in case of insufficient funds. 

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Autogiro refunds 

Debtors have the right to request a refund if the exact collection amount was not communicated prior or the amount collected was higher than expected. The refund must be requested within eight weeks from the day the payment was collected. Upon requesting a refund, the bank will launch an investigation to assess the claim's validity, contrasting the SEPA Direct Debit Core scheme where the refund is granted without any questions. The bank will process the claim within ten working days. If the collection was unauthorized, the payer can dispute the payment for up to 13 months after the initial collection date. 

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How Atlar can help

With Atlar you can access local Swedish BBANs, PlusGiro & Bankgiro numbers and gain access to local Swedish payment rails via all Swedish banks through an API & dashboard.

To save companies from manually managing payments and wasting engineering resources on building direct integrations with banks, we have built the Treasury Operating System that allows you to support all Swedish payment schemes – A2A, Giro Payments, Swish & Autogiro – out of the box. As mentioned before, the Swedish payments landscape is rapidly changing with the introduction of P27 and Atlar's platform makes it easy for companies to transition to the new infrastructure.

When you plug into Atlar’s API or use our dashboard, your company can manage payment flows end-to-end across all your banking partners – initiate credit transfers and direct debits, automate reconciliation, monitor transactions & balances across bank partners in real time, and track the status of payments live via webhooks to combat returns & refunds.

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Get in touch 

If you’re a company looking to automate payments over Swedish payment rails, we’d love to speak with you! Book a demo here.