Some thoughts on Apple Pay’s launch in Norway

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Late last week it was announced that Apple Pay were finally entering into Norway, courtesy of a partnership with three banks.

Read this piece from August last year where we speak about why they hadn’t already come into Norway and find it hard to “crack” Scandinavia, generally.

With this new announcement, I struggle to see how Apple Pay will create much of a dent in Norway, apart from stir up a bit of PR for themselves and their new partners.

Ok, ok, so Nordea (who are one of the Vipps solution member banks) are reporting an initial increase in customer sign-ups but this will not drastically impact their daily banking or bottomline. 

When Nordea issues a card, they make a small amount per transaction since it’s Visa / MasterCard. When they issue the same card with Apple Pay, they’re having to give a cut to Apple. So for every card payment made using Apple Pay, they reduce their revenue. Unless, of course, people actually pay more than they would have yesterday for the same goods and services.

I don’t think Norwegians will do something that many others who’ve trialled NFC wallets have done before them – A.K.A pay more… people will try and then they will continue to buy as before and banks will consequently earn less.

In the US – Apple’s home market – we see that the Starbucks app (which is a mobile payments app solving problems for Starbucks customers) has more traction and use than all the tech-giant payment apps.

In Norway, the problems that existing solutions solve for consumers and merchants – pre-ordering, skipping queues, etc. – aren’t addressed by Apple.

Nordea and Sbanken, two of the new Apple Pay partner banks, are already members of the Vipps solution. In Norway, this is, by far, the preferred and dominant solution. This dominance won’t be easily shaken.

Come PSD2, Apple doesn’t have to find banks to partner with. With a European license, they can access the accounts of everyone. We know that Apple has been turned down by other banks in Europe as Apple Pay doesn’t provide any clear financial benefits – it just costs the banks money.

I sent some of these thoughts over to Steven Anderson at Payment Week who was kind enough to write his thoughts here in response. Let me make it clear that what I was suggesting was not that Apple would be the loser in this instance or in any other market they launch. More so that the banks who partner with them in this or any other market have little to gain.

In Norway, the mobile payments winner has been decided, but on a pan-European and global scale, the winner hasn’t yet emerged. It’s in these markets that, unless a bank (or telco or somebody else) fails to act by creating a payments solution which can be used by anyone and actually solves issues, Apple – or the likes of Apple – have a real chance of making a dent.

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