Nordic banks’ payments infrastructure plan picks up pace
A group of Swedish, Danish, Norwegian and Finnish banks expect to launch a new piece of financial infrastructure next year for the establishment of their pan-Nordic payment network.
There weren’t specifics, but Henrik Bergman, deputy director for financial infrastructure at the Swedish Bankers’ Association, told Bloomberg: “It’s going to be very big, because you don’t just easily change the payment infrastructure.”
As FinTech Futures reported in February, the banks – Danske Bank, DNB, Handelsbanken, Nordea, OP Financial Group, SEB and Swedbank – were mulling the idea.
At that time, SEB said the current infrastructures are “highly fragmented along national borders”.
Their plan is to create an area for domestic and cross-border payments in multiple currencies (SEK, DKK, NOK and EUR).
Based on open access and common European standards, the infrastructure will “contribute to increased competition” among payment service providers in the region.
According to Bloomberg, the P27 project – so-called for the 27 million people who live in Sweden, Norway, Denmark and Finland – will build on the success of smartphone payment applications that Nordic banks have already created, like Swish in Sweden, Norway’s Vipps, and MobilePay in Denmark.
All the banks are aware of the threat from tech titans – like Apple or Samsung – to eat into their market share and so their collaboration is a clever attempt to stay ahead.
Bergman says banks and their customers may need to make substantial changes to their technology setups to participate. They “may have to adapt to something totally new. They may have a structure that’s easily adapted or an IT structure that’s more difficult,” he explains.
Jesper Nielsen, head of banking in Denmark for Danske Bank, also spoke with Bloomberg. He says lenders behind P27 expect to have selected a company by the end of the year to help guide the project, with the first payments possible in 2019.
Bloomberg says the project should be up and running by the time Europe’s revised Payment Services Directive takes effect next year.
The P27 group is still consulting with central banks, since all transactions eventually go through their systems.
“The work is on the rules first, and then who is going to deliver and what will be the system – those are the next questions,” Bergman adds.
