Norwegian banks defend against Silicon Valley mobile wallet threat
Norwegian banks have been keenly aware of — and concerned about — the prospect of mobile wallets developed in Silicon Valley affecting their own services. So much so that a group of banks has begun preparing to merge their payments systems into one platform and have it up and running by next August.
Banking group Eika, DNA, Sparebank 1 Gruppen and others will merge payment systems such as Vipps, BankAxept and BankID for the new venture.
The banks noted last week that the payments deal is preliminary, and that ownership stakes are subject to negotiation. The banks are also discussing the potential of taking their product into other markets.
"We have two choices," DNB Chief Executive Rune Bjerke said in a joint statement from the banks. "Either we let the existing payments infrastructure wither away, or we join forces and push forward."
A new company resulting from the payments scheme creation could employ up to 108 people, the banks said, while a merger of this kind could help "improve cost efficiency, strengthen innovation and enhance users' purchasing experience in the retail and consumer markets."
With Norwegian authorities' approval, the banks would want the company in operation by Aug. 1, 2018. Such a move would give the banks time to counter changes in Norwegian regulations, starting in 2018, that make it easier for companies outside of the banking industry to facilitate payments.
The banks see those changes as benefiting Apple, Facebook, Google and others out of Silicon Valley.
"Through this undertaking, the Norwegian alternative is better positioned to compete against the major foreign players," Vipps CEO Run Garborg said in the release.
In February, a consortium of 106 Norwegian banks took over Vipps, the mobile payments service initially launched by DNB Group. That move was completed with the same general defensive view of unifying mobile wallet concepts in the country.