Nordic payments -
a rapidly changing landscape

Smartphones and connected devices have brought ease, speed, and convenience to our daily lives. They’ve transformed the way we spend and manage our money.

Open Banking regulation has allowed fintechs and other innovators the opportunity to develop seamless, digital first payment experiences, which have changed our expectations of what great feels like.

So, it’s no surprise to find that European ecommerce is booming – a trend that’s here to stay. By 2026, the European ecommerce market is set to reach $2.8tn, 75% higher than 2021 levels.¹

Fraud is a key challenge to future ecommerce growth

The shift to digital has also created an opportunity for fraudsters, who are eager to take advantage of vulnerabilities they find in the market.

Across Europe, digital fraud is having a significant impact, with the average fraud rates for card not present (CNP) transactions 10 times higher than those seen in the face-to-face (F2F) environment.⁵

Globally, the most common digital fraud types include phishing, which involves duping individuals to share sensitive data, and clean fraud, where they use stolen data to make a purchase look genuine.

Checkout friction is a threat to merchant sales

To help mitigate the risk of fraud and to verify the consumer is who they say they are, the industry has rolled out the use of Two Factor Authentication (2FA).

This means consumers must either memorise (multiple) passwords or use a one-time passcode sent to their device. As a result, across Europe, the average time taken to complete checkout now exceeds 3 minutes.⁶

This is having a significant impact on cart abandonment, especially as 62% of consumers have indicated they are likely to give up on a purchase when checkout takes longer than 2 minutes.⁶

Nordic consumers have rapidly adopted BNPL solutions

Nearly 50% of consumers have used it in the last 6 months¹ – 20pp higher than the European (ever used) average.¹

Even more impressive is that in Sweden, BNPL represents 24% of total ecommerce spend – the highest anywhere in the world.³ This is closely followed by Norway at 18%.³

This is largely due to the popularity of domestic wallets

In Norway alone, nearly 75% of consumers use Vipps, while Sweden closely follows, with 69% of consumers using their domestic solution, Swish.¹

As the likes of Apple Pay, Google Pay™ and more continue to be rolled out across the Nordics, digital wallets usage is set to increase further.

Iceland is a great example. Here, Apple Pay is the most popular wallet used and penetration rates are very high, reaching 29% of all ecommerce spend.¹

Further evidence of the rising popularity of digital wallets can be found when looking at usage in specific sectors. In travel, fashion and accessories, streaming services, event tickets and food delivery, growth rates all exceed 33%.¹

The future is bright for ecommerce in the Nordics. Market growth is expected to be nearly 3 times faster than F2F.³

Similarly, as digital wallets become more widely available, we expect to see continued adoption and growth in usage. In Europe as a whole, the forecasts are for nearly 200m more active users, reaching a total of 580m by 2025.¹

Simultaneously, consumers are showing their growing preference for using Card on File (CoF) solutions. It helps reduce friction by removing the need for consumers to enter their details at checkout. Over 50% of Nordic consumers now save their credentials on file with a merchant, reaching as high as 74% in Sweden and Iceland.¹

Fraud

Like the rest of Europe, digital fraud has also been a key issue in the Nordics, where 80% of all value lost to fraud is from CNP channels.¹

Nordic consumers are experiencing fraud in a variety of ways, with the most common being their card details being stolen and having their bank account or digital wallet hacked.¹

Checkout friction

Despite the growing popularity of CoF, almost half of ecommerce transactions today continue to be made through the friction heavy manual entry process.¹

This journey consistently falls short of the speed, ease and convenience consumers are looking for.

Considerations for payment enablers

The Nordic ecommerce market represents a significant opportunity for enablers to tap into a growing sector that embraces innovation.

However, to capitalise on this potential, they must address the challenges of fraud and checkout friction.

By offering a consistently secure and seamless payment experience, solution providers can establish trust - setting the stage for sustained growth and success in one of the world’s most digitally advanced markets.

Implications for merchant strategy

Merchants must keep up with rapidly evolving expectations. In particular, they will need to replicate and enhance the choice, security and trust consumers have with F2F.

Without chip-and-pin, merchants also need a solution that easily authenticates the customer, confirming they are who they claim to be.

And the entire end-to-end user experience needs to be as ‘invisible’ as possible, otherwise merchants will continue to face the risk and frustration of high basket abandonment.