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Trust and legislation are key to success of instant payments

In Denmark, the population has been quick to adopt new technologies such as mobile payments and have had an instant payment system since November 2014. As eurozone countries prepare to adopt the SEPA Instant Credit Transfer (Inst) scheme next month, the European Payments Council (EPC) asked Finance Denmark's Kristian Ring what other countries can learn from the Danish journey to instant payments.

Trust

One key thing Ring mentions in the interview is the Danish system of assigning a unique identifying number – known as a CPR – to every resident. The system is managed by the Ministry of the Interior and Ring describes it as the “very basic foundation for the widespread trust in digital technologies in Denmark”. The CPR was used to create a digital signature system called NemID, providing a common sign-in mechanism supported by the financial industry.

Legislation

However, the Danish government has used legislation to spur digital development and citizens have been obliged to access a range of public services through digital portals using their NemID. There's also a system whereby citizens are obliged to receive public digital post. Ring says that, last year, more than 100 million digital letters were sent to the 5.7 million Danish citizens.

Early digital adoption

Early introduction of payment cards has ensured consumers feel comfortable with cards and precipitated the move away from cash. The domestic payment card Dankort was introduced in 1983 and today cards represent more than 80 per cent of electronic transactions. Contactless cards were introduced in 2016 and already account for more than 25 per cent of all domestic card transactions. Cash now accounts for just 20 per cent of the aggregate value of all payments in 2016. This has all paved the way towards a more digital way of thinking about payments. This is shown in the uptake of MobilePay, which was introduced in Denmark in 2013. It's now used by more than 60 per cent of Danes. Ring also notes that providing user-friendly services is a key component of rolling out successful digital payment schemes: “If you cooperate within the sector in providing user-friendly products you will get widespread usage very fast.”


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Payments - Bill Collection
SEPA Payment Structure & Services

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