Request to Pay is Transforming the Future of Nordic Transaction Banking

As real-time payments (RTPs) and Request to Pay (R2P) evolve, the landscape offers fresh opportunities for transaction banks in Sweden, Denmark, Norway, and Finland.

To stay competitive and deliver value, banks must grasp the region’s unique developments in R2P and their impact on corporate and retail customers.

Mobile and Instant Payments in the Nordics: A Test Lab for Innovation

Nordic countries have become a pioneering ground for mobile payments, with each market taking a distinct path in developing their mobile payment ecosystems. In Sweden, the Swish app, a bank-owned utility, drives real-time payments, allowing seamless transactions between bank accounts. Denmark's MobilePay, initially launched by Danske Bank, has become the de facto payment app, while Norway's Vipps followed a similar path under the leadership of DNB. Finland's ecosystem is more diverse, with MobilePay being available to all banks and Siirto offering a Nordea and OP-backed platform for their customers.

Despite these advancements, none of these solutions function as full-fledged "wallets," and they operate under different business models and rules. Each country’s solution has grown organically within its own market, creating a fragmented landscape. Recent changes, such as the Vipps-MobilePay merger and the potential OP+Nordea joint venture in Finland, indicate that the region is moving toward greater integration, though significant differences remain.

Crucially, all of these mobile payment systems are built on real-time payment infrastructure, but they initially operated using proprietary systems, which means no interoperability across borders. Only recently has Sweden transitioned Swish to a standardized platform via TIPS/RIX-INST. Denmark and Finland are expected to follow suit by 2025, but the slow pace of instant payment adoption across other banking channels in the Nordics highlights the broader challenge of shifting from traditional batch-processing systems to a fully instant, real-time payments model.

The Rise of Request to Pay (R2P)

Request to Pay is set to play a pivotal role in the future of payments, offering significant flexibility and benefits for both consumers and businesses. However, the Nordics are lagging in terms of adopting the European standard for R2P (SRTP), with current mobile payment solutions offering their own proprietary payment request functions. This lack of standardization means that while domestic R2P solutions may work well, they do not enable cross-border interoperability.

The Nordics could see a shift toward using R2P for e-invoicing, which is, in essence, a structured payment request. With the volume of e-invoices continuing to rise, transitioning this stream to standardized R2P could drive significant efficiency gains, especially for businesses handling large invoice volumes.

While P2P and e-commerce payments are less likely to shift to European standards anytime soon, the adoption of R2P for invoicing and B2B transactions could unlock new efficiencies for corporates and merchants. This would allow businesses to request payments in real-time, improving cash flow management and creating new opportunities for banks to provide value-added services.

The Future of Real-Time Payments and Request to Pay in Corporate Banking

The move toward real-time payments, particularly in the corporate and merchant segments, is poised to revolutionize the transaction banking landscape in the Nordics. With the forthcoming European Union (EU) mandate requiring all banks to support real-time payments by 2025, the region’s banks must accelerate their adoption of instant payments across all channels.

Request to Pay will further enhance the value proposition for businesses by allowing them to send and receive payment requests in real-time, offering greater control over cash flow and improving liquidity management. This is particularly important for small and medium enterprises (SMEs) and micro-merchants who rely on fast, flexible payment options to manage working capital.

Furthermore, the integration of R2P into real-time payment platforms will enable advanced features like bill splitting, installment payments, and enhanced cash flow management tools. As real-time payments generate rich transaction data, banks can use this data to offer more tailored services, from enterprise resource planning (ERP) integration to predictive analytics for better decision-making. R2P offers interaction with customer, where this leads to possibilities of loyalty programs and unique offerings based on segments or geographies.

Looking Beyond the Nordic Region

While the Nordics have long been at the forefront of payments innovation, they cannot afford to operate in isolation. The region must closely monitor global developments in real-time payments and R2P, particularly the EU's initiatives in digital identity and payments, such as the European Digital Identity Wallet (EUDI). These initiatives could reshape the future of payments by integrating digital identity and payments into a single framework.

The potential introduction of a Central Bank Digital Currency (CBDC) in Europe, such as the digital euro, also presents an opportunity for banks in the Nordics to explore new payment rails. Finland, for example, has seen its central bank take a proactive role in developing a national rulebook for instant payments.

Conclusion: Embracing Change and Capitalizing on Opportunities

The Nordic region's payment landscape is rapidly evolving, driven by advancements in mobile and real-time payments. For transaction banks, embracing innovations like Request to Pay and real-time payments will be key to staying competitive. The transition from proprietary, national solutions to standardized, interoperable platforms presents both challenges and opportunities, particularly in the corporate and merchant payment segments.

By looking beyond their borders and aligning with broader European and global trends, Nordic banks can not only enhance the customer experience but also unlock new revenue streams and service opportunities. As the payments ecosystem continues to evolve, early adopters of R2P and real-time payments will be well-positioned to lead the way into the future of transaction banking.