Nordic mobile wallets merge to take on global competition
Nordic wallets Vipps, MobilePay, and Pivo have announced that they would merge their wallets to give them full and free access to all their consumers across Finland, Denmark and Norway which would help them to take on competition from major players in the payments industry.
This merger is expected to give the new platform access to over 11 million consumers and would be processing 700 million transactions across 300,000 merchants. This would mark a big step for the region as the users would be able to use a single payment system across different countries, assuming the regulators in these countries are fine with the new platform.
Rune Garborg, CEO of Vipps, says: “Competition within payments is global, not local, and we need an even stronger footprint to compete with international players. By combining three of the best-loved brands in the Nordics, and building an even stronger technology platform, we can create world-class payment simplification for all.”
With the growth of the payments industry over the last couple of years, the smaller players have been facing the heat in the face of increased competition from the larger payments players who are looking to consolidate their position in the market with investments and added features and upgrades as well as low fees. To face this competition, small wallets like those in the Nordic countries have been forced to merge to remain competitive.
The new company will continue to have its headquarters in Oslo in Norway subject to regulatory approvals and the newly merged company will be one of the largest bank-owned wallets in Europe with the firms behind Vipps owning 65% stake, MobilePay owner Danske Bank getting a 25% stake and OP Financial Group, the owners of Pivo, getting a 10% stake in the new company.
According to the new arrangement, Vipps which is the largest partner in the venture and holds the most technologically advanced platform among the three would continue to provide the base infra for the new platform to operate upon and it would be expanded to accommodate the Danish and Finnish requirements in time.
This is probably the first time that wallets across countries have decided to merge and this would provide a very interesting use case to see how this arrangement would work out. Cross-border payments are a key for any payment provider due to restrictions surrounding jurisdictions and so this major would be keenly noted on how this would be handled and if all goes well, the new company is likely to reap the benefits of massive growth.