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Payment Methods In Nordic Region: Cashless Future In Sight?

While the use of cash is on the rise all across the world, the experts persist in saying that it might be abandoned altogether in the near future. Moreover, the popular opinion is that the Nordic countries will be among the first ones to go completely cashless, and there is even a date predicted for this to occur -  March 2023

However, are the Nordic countries truly displaying the signs of transforming into “cashless societies”? And, if so, what are the alternatives that are developed to replace it? Below, we will discuss the popular payment methods that the Nordic countries use in 2020, and assess whether their popularity is enough to make the use of cash unprofitable for the merchants and consumers alike. 

Credit/Debit Cards 

Credit and debit cards continue to dominate the Nordic countries as the most popular form of payment,  According to the recent findings, Denmark, Norway, Iceland, and Sweden occupied the top 5 places for credit/debit card usage in Europe. 

But what is the reason behind the card payment boom across the Nordic and Scandinavian countries? Well, one of the biggest drivers to be listed here is trust - in the system, government, and the bank of choice. In Sweden, which is currently regarded as the country closest to, if not the first cashless society in the world, trust has definitely proven itself as incremental to societal transformation. 

On top of the Nordics being increasingly accepting and open towards the new technological advancements in payment methods, there are two more reasons that are no less important than the general trust. In Nordic countries, merchants and service providers realize that by going cashless, they are actually able to save both the money and time that is spent on dealing with cash - which, on average, takes a total of 114 minutes per day. 

Moreover, by making the usage of cash less desirable to both the consumers and service providers, the Nordic government authorities contribute to the overall fight against local crime, as illicit activities are much harder to trace when operated on cash. 

Electronic payment systems 

Electronic payment methods are also growing in popularity fast among the Nordics, although their usage depends heavily on certain demographic groups - mature citizens still prefer card payments and direct bank transfers over mobile apps and e-wallets. 

One of the most popular electronic payment systems in the Nordic region is Neteller. This ewallet owned by PaySafeGroups owes its popularity to the anonymity of the services that it provides, as well as the efficiency and trustworthiness of the service provider. 

The anonymity that Neteller offers to its clients means that they can access services that are otherwise unavailable in their respective countries. A good example of that would be Norway, where Neteller is almost exclusively used for online gambling. When looking through the list of gaming websites on the Norwegian market, you will find that virtually every single one of them is accepting payments via Neteller. Thus, with this e-payment provider, an average Norwegian consumer can work around the intricacies of the local regulatory environment, with no legal repercussions to fear. 

When talking about the most prominent electronic payment providers across the Nordic region, one has to mention PayPal. This international e-payment service provider has maintained its place as the second most popular payment method across the Nordic states, often succeed only by the locally developed solutions or by the contactless payment apps, such as Google or Apple Pay. 

Finally, Swedish Swish, Denmark’s MobilePay, and Norway’s Vipps are, without a doubt, honorable mentions on the list of most popular payment methods in the Nordic region. As of 2019, Swish was used by 82% of the survey responders in Sweden, 78% of Norwegians used Vipps for mobile payments, while 85% of Danes and 20% of Finns used MobilePay for financial transactions. 

Newest Solutions To The Payment Methods - Is The Future Cyborg?

The Nordic countries’ commitment to abandoning cash altogether is driving the region to find solutions that often seem too futuristic to become the reality. Among them is the radio frequency identification (RFID) chip that allows individuals to proceed with payments with a simple wave of the hand. 

While it does sound like something out of the science fiction novel - a chip inserted under the skin that you can pay with - it is actually slowly becoming more and more attractive to the Swedish citizens. After the original 8 brave volunteers had their chip inserted, the number has grown to a little under 1000 people. 

While the technological advancements - whether the commonly known ones, like the mobile apps, or the cutting-edge ones, like the microchip, are occupying the minds of the Nordics and challenging their everyday realities, does it mean that the cash days are over in this region? 

It is hard to give a definitive answer to this, but according to the recent research findings, half of the Nordic population that is not using mobile payments still prefers cash. There are several reasons for this phenomenon - some claim that they simply do not see a point in any alternative payment systems. On the other hand, some claim that using cash payments seems more reliable and less confusing. Overall, the Nordic countries are undeniably ahead of the rest of the world in becoming cashless, but, in order to complete the transformation, certain demographic groups need to be targeted specifically - especially citizens aged 50+.

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