12/7/2015 SWIFT International Banking Operations Seminar, SIBOS, is an annual banking conference that SWIFT is organizing. SIBOS 2015 was held in Singapore. Bankgirots CEO Torbjörn Ericsson participated in a panel on how we in the Nordic countries are working with real-time payments.
Now you can take part of this perspective through the abstract that follows.
SIBOS 2015: A Nordic perspective on real-time payments
DNB, Bankgirot, Nordea and Nets held a joint session at SIBOS where they presented their insight into and experiences with digital banking and real-time payments in the Nordic region. The common denominator across the Nordic countries is market readiness and, as a result, a high adoption rate.
Dag-Inge Flatraaker, General Manager at DNB, opened the session by presenting figures from the European Commission’s 2015 study “The Digital Economy and Society Index”, which shows that the Nordic markets are among the most advanced when it comes to digitisation. In such digitally mature societies, payments in real time are not only demanded, but expected, he explained.
The rapid growth of our own mobile peer-to-peer (P2P) service Vipps shows that the market is more than ready for payments in real time. Since the launch in June, we have reached 1 million users in just five months and could expect to have more than half of the Norwegian population within a year, the fastest consumer uptake ever, Dag-Inge Flatraaker said.
Cash on its way out
The Swedish market is experiencing the same demands and expectations, Torbjörn Ericsson, CEO of Bankgirot, explained. In cooperation with the six largest Swedish banks, Bankgirot launched the real-time payment App “Swish” in December 2012. The mobile peer-to-peer solution quickly became very popular: 70 % of Swedes between the age of 16 and 29 are using the service, and four new users sign up every minute.
Many countries are still struggling with consumers preferring to use cash. It may have come as a surprise for some of the Sibos participants when I told them that Swish has become more prevalent than cash in such a short period of time, Torbjörn Ericsson said.
Peer-to-peer as the key growth driver
Freddy Haraldsen, Group Executive Vice President at Nets, presented how Nets on behalf of the Danish Bankers’ Association built a real-time payment infrastructure that is available for both mobile and traditional transactions. The transaction volumes are growing rapidly, with mobile peer-to-peer solutions as the key growth driver. More than 80 % of the mobile payment transactions in Denmark are now real time.
Banks have emerged as front-runners in delivering state-of-the-art real-time payment infrastructures, and they also deliver the mobile solutions that drive the growth of real-time payments, Freddy Haraldsen said.
A question of when, not if
A decision on real-time infrastructure is still pending in Finland, Erkki Poutiainen, Strategy Manager at Nordea, explained. He gave a presentation on how instant payments can reduce waste in corporate payments and stated that while instant payments offer obvious benefits to individuals, the situation for businesses is more complex. However, the question is not if, but when real-time payments emerge.
The Finnish banks launched an RFI for “urgent payments” in 2014. The challenge is to choose between a pan-European solution with Single Euro Payments Area (SEPA) reach and a local solution with a shorter implementation frame, Erkki Poutiainen said.
Text: Frode Riis Andersen