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.
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