New sector plan secures future payments infrastructure in Denmark

A groundbreaking plan for Denmark’s financial sector has been approved by the board of Denmark’s banking association, Finance Denmark. According to the new sector plan, P27 Nordic Payments will become the new national clearing house, replacing Finance Denmark, which, for historical reasons has carried out this task on behalf of the Danish financial sector.

The new plan is a crucial step toward achieving the goal of making it easier for businesses and citizens in Denmark to pay bills and send real-time payments to other Nordic countries. In the future, it will also become easier to make cross-border payments in Nordic countries.

To discuss the plan and the potential impact of this important milestone, we spoke with Michael Busk-Jepsen, Director of Digitization at Finance Denmark.

What does this sector plan mean for the payments industry in Denmark?

It means that Denmark’s financial sector, with broad sector representation, has decided to secure robust and stable systems enabling Danish krone transactions between participating banks to be cleared at any time and settled at the central bank, Danmarks Nationalbank.

It provides the market with favourable conditions for developing state-of-the-art payment products for Danish residents and businesses, and also supports financial stability in Denmark.

And what does it mean for customers, the end users?

It will eventually make it even easier for companies and individuals to make payments and potentially also make it easier to pay bills in the future.

The Danish banking sector is investing hundreds of millions of kroner in the continued modernization of these systems, and once the new payments infrastructure has been put into operation, the players in the payments market will have new opportunities to develop innovative solutions for the benefit of consumers.

At the same time, Denmark will be brought up to date with the latest payments standards, which again is instrumental for enabling payments solutions across the Nordic region and potentially also in the rest of Europe. It will bring great benefits to all of us.

Can you provide any practical examples of what this update might mean for a Danish banking customer?

Sure. The updated infrastructure could make it possible for a MobilePay user in Denmark to make a payment to a Swish user in Sweden.

Another example would be a Danish company wanting to send a real-time payment to a European partner. It will also be possible to develop new and innovative bill payment and other solutions.

This new, open infrastructure will create the foundation for building state-of-the-art payment solutions for customers throughout the Nordic region.

Furthermore, Danish banking customers will continuously benefit from this modern payments infrastructure since banks and other providers will be able to build new customer solutions on top of this infrastructure.

What role will P27 have in this web of infrastructure participants?

P27 will have a very important role since it will be the sector’s new clearing house, not only in Denmark, but also in Sweden and Finland. Hopefully, Norway will also join our Nordic clearing-family.

This can potentially result in a Nordic clearing setup with full interoperability across the region, replacing the current national clearing operations.

What do you think will be the most important changes in the years to come following this decision by the Danish financial sector?

Among the most important changes will be a more harmonized payments sector across the Nordics, which began with our common Nordic payments schemes. This will enable banks to make payments in other Nordic countries using Nordic currencies through a single platform and with the same rules and standards as with SEPA.

Harmonized cross-border, cross-currency payments will be a key feature for nurturing further innovation – and will also help bring our countries closer together. Harmonization will also be crucial for making instant, cross-border payments a reality – a global trend that’s a key driver for innovation.

I believe the Nordic region will soon be one of the first regions in the world where sending real-time payments in different currencies between different countries will be just as easy as sending a text message.