Nordic FIs Agree To Fund Instant Payments Service P27

Several of the largest banks in the Nordic region have reached an agreement to finance the development and rollout of instant payment system P27, Reuters reported Wednesday (Oct. 9).

The initiative would create a real-time payments service that consolidates existing payment services into a single system, reports explained. Both consumers and businesses would be able to use the platform to send payments in real time from a mobile phone or corporate bank account, and support domestic and cross-border transactions within the Nordic region.

Danske Bank, Nordea, Swedbank, Handelsbanken, SEB and OP have all agreed to finance the P27 initiative until it generates its own revenue by charging fees, reports said. Those fees would be determined based on the size of a transaction. The banks and P27 expect to roll out the consolidated service by the beginning of 2021, though it will first need to obtain a license to clear payments in its home country of Sweden.

“P27 will become the world’s first integrated domestic and cross-border real-time payments platform,” P27 CEO Lars Sjogren said in a statement this week, though he declined to provide details on how much the banks would invest in the project. “The Nordic banking sector already has a leading position in Europe, and P27 will help further expand and consolidate this position.”

Sjogren pointed to the importance of cross-border payments efficiencies within the Nordic region, reports said, with trade between Nordic countries accounting for a quarter of its GDP.

“The Nordic countries are relatively small, so when we combine our markets we get a different scale and become much more attractive to partner with,” he added. “This means we get better service for a lower price.”

Earlier this year P27 announced a partnership with Mastercard to support real-time and batch payments in the region. In an interview with PYMNTS at the time, Mastercard President of New Payment Platforms Paul Stoddart explained to Karen Webster that P27’s batch payment capability will be particularly useful to corporates, especially as more businesses become aware of the benefits of real-time payments.

“It takes time for an entire ecosystem to shift,” he said. “But when it comes to real-time payments, that time is coming, and businesses are figuring out how to get aboard this growing trend.”