Pioneers in the regionalisation of payments

Our 24/7 world is changing people's expectations of payments: we want instant access to products and services, and we expect our money to keep pace. While for many countries this is somewhat new, the Nordic region has been ahead of the curve for a long time. Sweden, Norway, Denmark and Finland have been building and scaling their real-time payment infrastructures for over a decade, and are now among the most digital economies anywhere else in the world. 

So what ingredients have created such a shift? And what can we learn from these ‘pioneers in payments’?

If we dig right back to the 1960’s, the Nordics were already tapping into the digital economy. Sweden's Bankgirot was one of the earliest adopters of the computer, having one installed in 1965 — just a year after IBM introduced the first electronic computer system to the market. In the early days, all bills were paper-based and Bankgirot staff had to handle and process them manually. The first computer meant they could streamline this process by introducing paper scanning. Bankgirot was also the first operator to outsource a core infrastructure service. Nearly ten years ago, Vocalink, now a Mastercard company, designed, implemented Autogiro, Bankgirot’s direct debit system. The service, which we continue to operate, underpins the payment market for the six million people and more than 500,000 businesses that rely on it.

This early digital adoption was also true when it came to mobile phones back in the 1980s and 1990s (NMT – or Nordic Mobile Telephony was the first international, albeit analogue, mobile phone standard launched in 1981, while the later digital GSM system was first deployed in Finland in 1991), it was true of internet adoption, and subsequent internet banking and mobile banking adoption.  According to the Danish Payments Council, Danish citizens are the most advanced globally in terms of internet usage: in 2017, 88% of Danish Internet users already had internet banking, while 82 percent shopped online. Countries such as Denmark and Sweden also lead the way in terms of being the most cashless.

The danger with any examination of the Nordics is we tend to treat them as a single market when in fact each country has their own unique and specific traits. Nevertheless, perhaps more than any global area, there is considerable amount of cooperation and crossover with all countries sharing many social and economic commonalities.

Fast forward to today and the Nordics continue to embody this culture of collaboration, not just cross-border but also nationally — we’ve seen many times across infrastructures within a region where both political parties and competitors put their differences aside and try to come up with the best possible solution for society.

The understanding that greater collaboration brings greater benefits to all, is also what’s behind P27. In early 2018, P27, a payment company founded by a group of banks in Denmark, Sweden and Finland, devised the concept for a world-first real-time and batch multi-currency payments platform for the Nordics. Mastercard was awarded the contract to deliver this. This system will connect the 27 million people in the Nordics and enable them to transact seamlessly regardless of where in the region they are.

When we announced our partnership, Lars Sjögren, CEO of P27 Nordic Payments Platform commented: “This is change for real. By joining forces across the Nordics we will be able to develop instant payment solutions in a way that each country never would accomplish by themselves… further boosting innovation and growth.”