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Nordic banks plan common cross-border payment infrastructure

Banks in the different Nordic countries plan to move to a shared payments infrastructure

A group of Danish, Finnish, Norwegian and Swedish banks are looking into building a pan-Nordic payment infrastructure supplemented with common products.

Changing customer expectations, new regulations and consolidation among suppliers has transformed how payments infrastructures are designed.

Claus Bunkenborg, vice-president of personal banking at Danske Bank, told Computer Weekly: “Together those factors have made the payment infrastructure into a financial utility where scale, security, speed and efficiency are key, warranting a proposal like the one we are exploring.”

In addition to Danske Bank, the banks involved in the project are DNB, Nordea, OP Financial Group, SEB and Swedbank. They aim to create the world’s first area for domestic and cross-border payments in multiple currencies (SEK, DKK, NOK and EUR).

Despite the already close ties between the Nordic countries, the banks say the current payment infrastructures are still highly fragmented along national borders. A shared infrastructure could make cross-border payments easier, foster further trade across the countries and encourage the development of new products and services.

Norway and Sweden are already running similar infrastructure projects on a domestic level, but the new initiative aims to create a shared system across the region. “As payments become even more mobile, digital and instant, so must the underlying infrastructure,” said Bunkenborg.

No decision has been made about using a particular technology for the payment infrastructure, but it will be based on open access and common European standards. This is to ensure instant payments would work across all European countries, said Bunkenborg.

This isn’t the first time Nordic banks have worked together. In Sweden, the six largest banks collaborated to develop the country’s successful mobile payment system Swish.

Read more about Nordic payments technology

In Norway, more than 100 banks joined forces in 2017 to take over the mobile payment platform Vipps. But Bunkenborg said it is not currently possible for a user of Vipps in Norway, Swish in Sweden or (mobile payment app) MobilePay in Denmark to pay each other, and this is partly due to the lack of common payment infrastructure.

However, the proposed changes will make it possible for users across the Nordics to pay each other. The plans are at a very early stage and the next step for the banks is to consult relevant stakeholders on taking the project forward.

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