The Nordic countries and past vikings, are virtually cashless societies in 2023. There's no need to bring cash to come visit. The Nordics (i.e., Denmark, Norway, Sweden, the Faroe Islands, Iceland and Finland) aside for being the happiest group of countries, have intensified their journey towards digital payments.

Status and how they got here

Even prior to the advent of chip- and contactless card payments, little cash were used in physical, retail stores. But since 2012, mobile person-to-person (P2P wallets and mobile-enabled card payments (Google-, Apple-, and Samsung Pay), have accelerated the use of digital payments in the Nordic countries to the point where digital payments make up between 88% and 97% of payments in physical stores! See below infographic.

The road to the Nordics being virtually cashless, comes from a series of directly- and indirectly related events ultimately leading to its citizens, collectively being amongst the most digitally savvy in the world and faithfully and quickly embracing new technology.

A probable foundation was laid in the 1960s where Nordic citizens started being issued a personal identification number (social security number or SSN). This simple, 10-11 digit number has been instrumental in, and likely vital for, the journey towards a more efficient, and now also very digital, society where all citizens are issued eID to access and authorize digital public-, banking- as well as commercial services.

Denmark

Since the mid-1980s, Danes have been heavy users of card payments using the [past bank owned] domestic debit card scheme; Dankort for physical- as well as e-commerce.

In 2013, ingenious [free for consumers] and bank agnostic P2P mobile apps such as Swipp (since defunct) and the award winning MobilePay launched. MobilePay leverages Mastercard’s instant clearing (originally developed by Nets) to facilitate instant account to account payments. Today, MobilePay is used by 75% of every man, woman, and child, 114 times a year, averaging 48 EUR per transaction. Of the many services that MobilePay offer (bill payments, recurring payments), a whopping 60% of domestic e-commerce is by way of MobilePay!

Adding the success of mobile card payments, especially Apple Pay (Denmark is a very much an iPhone country), cash payments have reduced to 12% in physical stores.

Sweden

Sweden has not had the luxury of a national debit card scheme, hence the cashless journey has relied mainly on the international schemes such as Visa and Mastercard.

But in 2012, Sweden’s six largest banks launched Swish, a P2P mobile app, free for consumers. From launch, Swish has utilized a joint commercial/central bank clearing and settlement solution to perform account to account payments. Today, Swish has 8,5 mio. users (out of a 10,5 mio. population), doing 107 payments a year, averaging 45 EUR.

In Sweden, it is not mandatory for brick-and-mortar shops to accept cash. And together with the proliferation of contactless card payments and OEM mobile card payment wallets (Apple-, Google-, and Samsung Pay), Sweden has gone increasingly cashless with a mere 8% of payments in physical stores being cash.

Norway

Since the 1990s, Norwegians have had their bank sector owned BankAxept debit card scheme which over the last years has gone from physical use only, to online and contactless functionality as well.

From initially having three competing mobile P2P apps, the jointly bank owned Vipps prevailed. Today, Vipps is used by 78% of all Norwegians, 101 times a year.

Societal- and market factors are very similar to Denmark and Sweden, so unsurprisingly, Norwegians are also very much cashless. The Norwegians are actually Europe’s most cashless: A measly 3% of payments in the street stores of Norway are cash! 

Finland

Finland does not have a domestic card scheme and in some ways differ from Sweden, Denmark, and Norway on cooperation between banks. Finland is also part of the Eurosystem and the Euro, where the three other countries have their own currency and central bank settlement systems.

So, where Denmark, Sweden, and Norway each have a single, very successful mobile P2P app, Finland has at time of writing: MobilePay (open to all) and Pivo (mostly customers of OP Bank, but open to all) - and a third; Siirto (open to participating banks' customers, mostly used by Nordea customers).

However, Finland is equally card (and iPhone) centric with a historically very-well functioning setup for easy and smooth bank account to account payments when doing e-commerce and the like. Today, only 6% of payments in physical Finnish stores are cash.

What are the Nordic learnings 

Each market and region come with its own, unique characteristics. There’s not a blueprint design that may inspire other markets in becoming as cashless as the Nordics. But the P2P mobile apps have certainly been instrumental in speeding up the cashless situation and have expanded the landscape of ingenious ways of paying.

Key for the success of these aps, have undoubtedly been ease of use and an awesome user interface and –experience upon which value-added services and user “stickiness” has been built.

What is in store for Europe

Outside of the Nordics, on mainland Europe, non-cash payments seem also to gain more foothold, likely brought about by an increase in e-commerce and card payments during the COVID19 pandemic.

Behind the scenes and under the hood, regulatory and infrastructure initiatives will advance this development further.

EU’s PSD2, a growing embrace of [multi-currency] TIPS from the Eurosystem as well as EBA Clearing’s RT1, (and its imminent Request To Pay), an increased focus on Europe retaining control of its monetary system through various measures and initiatives (such as EUs Markets in Crypto Assets regulation and the rapidly evolving digital Euro project from the ECB) will revolutionize all Europeans’ payment habits.

Disclaimer: Retail payments is not a static subject matter and as such, some of the above text may be factually- and contextually outdated from time of writing.