Friday, 9 June 2017

Nordea/Gunilla Garpås: Mobile payments in the Nordics

05-01-17 11:55 | Digital banking | The Digital Hub
In our Nordic countries 8 out of 10 persons have a smartphone and the Internet penetration is around 95 %. We are very technologically savvy and good at adapting to new technological solutions and services. There is no wonder why mobile payments are increasing explosively!
What is a mobile payment?

A mobile payment user is defined as someone who uses a phone, tablet, or wearable to make a payment in person, online or in an app. Mobile payments are, on a high level, divided into person to person payments and consumer to business payments which in turn are divided in payments in physical stores and payments in web shops or apps.
Why pay with your mobile phone?

Nowadays, we always carry our most valuable possession around with us – which is the biggest reason for us to use it for payments. It is closest at hand at the moment of purchase!

When our phones became small computers with internet access, the development has continued rapidly with tablets, mobile-friendly websites, apps and mobile payment methods. A lot of apps come and go but some become quite successful. Shopping via apps is a rising trend and today around one in five have made a purchase through an app on either a mobile phone or a tablet.

It’s interesting to note that when creating a webpage or a shop for selling online the new trend is “Mobile First” which indicates how vital it have become to have a mobile-friendly website or mobile app.
So what’s happening in the Nordics – and where is Nordea in all this?

In Denmark, Norway and Sweden different domestic mobile payment methods are predominant. They all started as person to person payments but are now also available as a mean for the corporate customers to get paid.

Internationally, there are countless mobile payment solutions but they are not that visible in the Nordics.  Not many of us have paid by Apple Pay, Pay Android, Samsung PAY or MasterPass yet but this will probably change during this year. 
In Sweden, mobile payments are almost equal to Swish

Swish was launched in 2012 as a person to person payment and quickly became a natural and efficient substitute to cash. Public awareness of the payment method is almost 100 percent and 5 million persons, more than half of the Swedish population, is enrolled to the service. Swish is now also available for our corporate customers who can chose to use Swish Företag for instore payments or as an alternative to sms-payments and Swish Handel in their web shops or apps.  

Swish is owned by Getswish AB, which in turn is owned by Nordea together with five other Swedish banks.
MobilePay continues to strengthen its position in Denmark

Danske Bank launched MobilePay in 2013 to address the need for simple money transfers between persons. After three years, almost 3,3 million Danes have downloaded the app and MobilePay is now also available as a payment method for instore payments, in web shops and apps.

As of today, Nordea and some other banks have joined MobilePay as distribution partners.
Vipps is the most popular mobile payment solution in Norway

DNB launched Vipps as a person to person payment in 2015 and already over 1,5 million are using the service. As with both Swish and MobilePay, Vipps is now also available for the corporate customers.

Nordea offers MobilePay together with Danske Bank. MobilePay is the second most popular mobile payment method in Norway with extensive functions for the corporate customers.
Siirto will soon be launched in Finland

Even though Finland has been one of the mobile phone countries in the world, not that much has been happening on the mobile payments area. But shortly, Finland will follow the steps of the neighboring countries and launch a domestic mobile payment solution, here called Siirto. This spring person to person payments will be launched and the plan is to follow up with different solutions for the corporate customers soon after. 

Siirto is owned by the ATM operator Automatia which in turn is owned by Nordea together with two other banks.
With the increase of mobile payments, the use of cash decrease

More than 350 years ago, Sweden became the first European nation to print paper money - now it could be the first to phase it out. The global interest is huge! There have been numerous articles and reports on how Sweden will become the first cashless country in the world. Just search for “Cashless Sweden” at YouTube and you will be able to watch a whole lot of reports on the topic.

Sweden may well become a cashless society, but probably not in the coming ten years. The actual use of cash, however, can become marginal in a very short time. The Swedes put high trust in the payment systems and its actors which in combination with a strong technology-interest lead to a willingness to use mobile payment services. The widespread and growing embrace of Swish is helping hasten the day when Sweden replaces cash altogether.

To sum up – it happens a lot in the (mobile) payments area! And even though we might feel a bit dazzled by the speed of the development, one thing is for sure – change will never be this slow again!

/ Gunilla Garpås, responsible for Swish at Nordea.
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