Payments Landscape in Finland: Opportunities and Risks to 2022

Payments Landscape in Finland: Opportunities and Risks to 2022


Finland’s well-developed infrastructure, affordable and widely available financial products, strong presence of alternative payments and consumer preference for electronic payments have driven Finland towards a lesser cash-dependent society. Finnish consumers are prolific payment card users. The frequency of use of payment cards is the fourth highest globally, standing at 188.6 in 2018, behind only Denmark, Estonia and Sweden. Finland is moving towards a cashless society, with the central bank foreseeing a cashless Finland by 2029. Consequently, the share of cash in total payment volume declined from 33.5% in 2014 to 27.7% in 2018.

Debit cards are the most preferred card type for payments in Finland, with debit card payments accounting for 78% of overall debit card transaction value in 2018; the frequency of debit card payments accounted for 191 yearly transactions in 2018 - significantly higher in comparison to credit cards (36). Debit cards dominate the overall payment landscape in 2018. The debit card penetration in the country is adequate, accounting for 1.5 cards per individual, supported by the strong adult banked population, which stood at 99.8% in 2018. The introduction of Payment Directive 2014/92/EU - which entitles all banks in the EU to offer a basic bank account at a reduced price, and account switching facilities - contributed to a rise in debit card penetration.

There were 8.3 million contactless cards in circulation in 2018, increasing from 1.8 million in 2014. According to the central bank, the number of contactless payments grew two fold from 2016, and accounted for 376 million in 2017, accounting for 23% of all card payments. The Finnish contactless payments market is rapidly growing. All major banks such as Nordea, OP Bank and Danske Bank now offer contactless-enabled cards, while all major mobile payment providers are compatible with contactless payment technology in Finland.

E-commerce market in Finland grew from €6.6bn ($7.6bn) in 2014 to €10.1bn ($11.6bn) in 2018, at a review-period CAGR of 11.3%, much lower than in comparison to its peers. The relatively slow growth can be attributed to consumers not accustomed to this channel and low investment made by retailers in this space. With merchants now investing in this underpenetrated space, coupled with the availability of a secure mobile and card-based payment environment, will drive the market’s growth over the forecast period.

The report Payments Landscape in Finland: Opportunities and Risks to 2022, provides detailed analysis of market trends in the Finnish cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including cash, cards, credit transfers and cheques during the review-period (2014-18e). The report also analyzes various payment card markets operating in the industry and provides detailed information on the number of cards in circulation, transaction values and volumes during the review-period and over the forecast-period (2018e-22f). It also offers information on the country's competitive landscape, including market shares of issuers and schemes. The report brings together research, modeling, and analysis expertise to allow banks and card issuers to identify segment dynamics and competitive advantages. The report also covers detailed regulatory policies and recent changes in regulatory structure.

The report provides -

  • Current and forecast values for each market in the Finnish cards and payments industry, including debit and credit cards
  • Detailed insights into payment instruments including cash, cards, credit transfers and cheques. It also, includes an overview of the country's key alternative payment instruments
  • E-commerce market analysis
  • Analysis of various market drivers and regulations governing the Finnish cards and payments industry
  • Detailed analysis of strategies adopted by banks and other institutions to market debit and credit cards
Companies mentioned: OP Bank, S-Pankki, Nordea, Danske Bank, Aktia Bank, Saastopankki, Svenska Handelsbanken, Mastercard, Visa, Diners Club, American Express

  • In October 2018, Diners Club, a payment scheme provider, announced it was to exit the Finnish market by May 2019. Consequently, the issuance of new Diners Club cards ceased in Finland. SEB Kort, an exclusive partner of Diners Club, announced it was to replace its card portfolio with Mastercard-branded cards from May 2019 - in turn increasing the share of Mastercard.
  • In a bid to develop faster payments, Finland is set to completely adopt the pan-Euro instant transfer system SCT Inst in 2019. This service is currently offered by three banks/payment providers. Most recently, in June 2018, Nordea Bank enabled its customers to receive instant euro payments from senders in the euro area.
  • To capitalize on the growing e-commerce market, merchants are now gradually investing in this space. For instance, the K Group, an online grocery store, announced to expand its online presence from 90 stores to 140 stores in March 2018. Similarly, in May 2018, Komplett Group - a Norwegian e-commerce company - entered the Finnish market. The rise in e-commerce activities will drive electronic payments in the country.
Reasons to buy
  • Make strategic business decisions, using top-level historic and forecast market data, related to the Finnish cards and payments industry and each market within it.
  • Understand the key market trends and growth opportunities in the Finnish cards and payments industry.
  • Assess the competitive dynamics in the Finnish cards and payments industry.
  • Gain insights into marketing strategies used for various card types in Finland.
  • Gain insights into key regulations governing the Finnish cards and payments industry.

Market Overview
Executive Summary
Card-based Payments
E-commerce Payments
Alternative Payments
Payment Innovations
Payments Infrastructure & Regulation

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