Sweden: A FinTech Legal Overview

The Current Landscape and Activity in the Swedish Fintech Sector

Sweden remains a leading European fintech hub recognised for its advanced digital infrastructure, robust regulatory framework and skilled talent pool. The country frequently ranks among the top four in Europe and the top ten globally for fintech investment. Sweden's early adoption of digital banking and electronic systems such as BankID, as well as mobile payment solutions, has fostered a thriving fintech culture. This continues to attract substantial private equity investment, driving innovation in emerging areas such as peer-to-peer lending and loan consolidation.

However, the sector’s growth has slowed since 2022 due to rising interest rates. The tighter capital environment has made it more challenging for new entrants to secure investor funding, while established companies face increased pressure to improve profitability. Following years of weak GDP growth, Sweden is now entering a period of economic recovery, driven by expansionary fiscal policies and lower interest rates. These macroeconomic improvements are expected to ease capital constraints and support renewed fintech growth.

The Swedish IPO market, which has experienced a significant slowdown in recent years, is also showing signs of recovery. Several significant Swedish IPOs have taken place or are anticipated in both domestic and international regulated markets. Improving financial conditions and renewed investor confidence have increased optimism that IPOs will once again become a viable option for established fintech companies looking to grow and access public capital. A notable milestone was Klarna’s listing on the New York Stock Exchange on 10 September 2025, and reports suggest that Trustly is making renewed efforts towards an IPO. If these listings perform well, they could stimulate broader interest in public offerings among fintech firms and help to reignite activity in the IPO market within the sector.

Developments and new legislation

Reducing consumer over-indebtedness and strengthening protections in the credit market remain key objectives of Swedish financial regulation. These initiatives are expected to influence the fintech landscape by imposing stricter compliance expectations and altering credit-related business models. They also align with broader economic and regulatory trends, with heightened investor caution and evolving compliance frameworks shaping the operating environment for Swedish fintech companies.

The following overview outlines the key legislative changes and developments affecting the fintech sector.

Granting and mediating consumer credit requires full Capital Requirements Regulation (CRR) authorisation

A major reform to Swedish consumer credit regulations came into force on 1 July 2025, repealing the Certain Consumer Credit-Related Operations Act. Consumer credit institutions, which are often associated with short-term, high-cost lending, must now be authorised as CRR credit institutions. This means that they must be licensed as either a bank or a credit market company.

The reform significantly increases compliance obligations and costs for consumer credit providers and adds a requirement to accept deposits from the public, in addition to providing credit. Loan mediation institutions, which previously neither provided credit nor accepted deposits, are particularly affected. The new requirements are expected to render many of their business models unviable, which is likely to lead to a decline in fintech start-ups in the consumer credit market.

A transitional period applies until 31 July 2026, or until a firm’s application under the Banking and Financing Business Act has been processed. Substantial market consolidation is expected, with many of the approximately 70 existing consumer credit institutions likely to cease operations.

Amendments to the Consumer Credit Act (CCA) to counteract risky lending

Significant amendments to the Swedish CCA, aimed at reducing high-risk lending and preventing consumer over-indebtedness, came into force on 1 March 2025. Key changes include the following.

• Lower interest rate cap: The cap on credit and penalty interest has been reduced from 40 to 20 percentage points above the reference rate. This is expected to reduce the supply of high-risk loans and encourage stricter credit assessments, particularly for consumers with limited financial capacity.
• Extended scope of the interest rate cap: The cap now applies to all CCA-regulated loans, with the exception of mortgage loans, certain overdraft facilities primarily connected to credit purchases and loans below 2% of the price base amount (SEK1,184 in 2025). Previously, the cap applied only to high-cost credit. The extension aims to prevent creditors from restructuring products to circumvent the regulation.
• Restrictions on extending loan maturity: All credit, except mortgage credit, may now only be extended once, unless the extension is free of charge for the consumer or accompanied by a reasonable instalment repayment plan. This change is intended to prevent repeated extensions that could result in substantial costs and increased indebtedness.
• Cap on arrangement fees: A special cap on arrangement fees has been introduced. This applies to all credit under the CCA, except mortgage credit, and limits the arrangement fee to no more than 1% of the applicable price base amount when the credit agreement was entered into (eg, SEK588 in 2025). This prevents creditors from offsetting the lower interest rate with higher fees, thereby ensuring that the interest rate cap achieves its intended effect.
• Elimination of tax deductibility for unsecured loan interest: The former general right to deduct interest has been replaced with a more limited deduction, which only applies to loans that meet specific conditions regarding collateral valuation and maximum loan-to-value ratios. This deduction will be phased out during 2025–26, meaning that from the 2026 tax year, no interest deduction will be permitted for unsecured loans.

Developments in instant and cross-border payments

Since February 2024, Swish payments between banks have been settled in real time via the Riksbank’s RIX-INST system. Since November 2024, all RIX-INST participants have had to accept instant payments in accordance with the Nordic NCT INST rulebook. This enables banks and open banking providers to develop new instant payment products, such as instant invoice payments within online banking environments, beyond Swish.

However, despite these opportunities, the Riksbank’s Payments Report 2025 notes that, currently, only two smaller banks send instant payments daily in the standard format. Major banks are expected to expand their instant payment offerings soon.

Cross-currency instant payments were planned on the Eurosystem’s TIPS platform, which RIX-INST is connected to, via the TIPS Cross-Currency settlement service in autumn 2025. Initially, the service will support instant transfers between euros, Swedish kronor and Danish kroner. Banks and payment service providers using RIX INST will be able to join the TIPS cross-currency service to improve the efficiency of cross-currency and cross-border transfers, while fintech companies will have the opportunity to innovate in the area of cross-currency payments.

Criminalisation of unauthorised financial activity

The government has proposed that the operation of financial services without the necessary authorisation or registration with the Swedish Financial Supervisory Authority should be criminalised. This forms part of a wider initiative to combat unlicensed financial activity, particularly in higher-risk areas such as money remittance, currency exchange and certain crypto-related operations.

The new offence of "unlawful financial activity" would apply to individuals or entities that, intentionally or through gross negligence, conduct regulated financial business without having obtained the necessary authorisation or registration. The proposed law is expected to come into force on 1 March 2026, allowing firms time to review their business models and ensure that all their services are properly authorised.