Thirteen banks connected to Swedish instant payments solution Swish are set to test the Nordic payments platform P27 by the end of the year. P27 is described as the enabler of the API economy for the financial services sector in Nordic countries.
A joint initiative by Danske Bank, Handelsbanken, Nordea, OP Financial Group, SEB and Swedbank, P27 is exploring the possibility of establishing a pan-Nordic payment infrastructure for domestic and cross-border payments in the Nordic currencies and the Euro.
According to P27 CEO Paula Da Siva, instant cross border payments are a necessity in the relatively small, trade intensive, highly digitised societies in the Nordics.
After nearly two years of “painstaking implementation”, P27 will soon be ready to transition from working with prospective participants to real customers. First in line are 13 banks connected to Get Swish AB, the dominant instant payment solution in Sweden.
“We are currently onboarding and testing with real customers, and that’s very exciting,” says P27’s customer relations director Jacob Groth. “We’re doing everything we can to realise our vision and ambition. We now have central banks in the region moving in the same direction. That type of alignment will make it easier for us to leverage our vision of an integrated Nordic payments region.”
The current timeline calls for SEK (Swedish krona) instant preparations to be finalised during the second half of 2022, followed by SEK batch preparations to be finalised in early 2023. Banks connected to Swish, which is used by more than 90 per cent of the Swedish population, are at the front of P27’s drive toward processing the platform’s first transactions.
The Danish central bank’s move to include the Danish krona in the European Central Bank’s real-time settlement system TIPS, followed by a sector decision to move to P27, was another important milestone for P27. A transformation committee has already been set up in Denmark to facilitate the transition towards P27.
In a white paper released in June, P27 highlights the growing importance of instant payments and the need to ensure systemic resilience moving forward. This paper aims to explain how P27 sees its role and the role of other players in the payment ecosystem in the future.
It also warns that ‘banks in the Nordics cannot afford to sit idle while fast-paced developments driven by big and small fintechs aim to push them further and further back in the value chain.
P27 is also described as an opportunity for regional banks to develop their own crossregional services on top of the basic rails. Services can be fine-tuned for both individual banks, specific countries and for the entire region in a way that would not be possible when dealing with a European or global scheme.
“We now have central banks in the region moving in the same direction,” says Groth. “That type of alignment will make it easier for us to leverage our vision of an integrated Nordic payments region. Rather than having multiple systems to support the same processes, you can now have one system supporting those processes across multiple currencies, which is a huge benefit.”
Propelled by Nordic central bank alignment around TIPS and the growth in instant payments, P27 will be able to offer Nordic banks full reachability across the eurozone. In addition, P27 will make it possible for banks in Germany or the Netherlands to settle payments in Nordic currencies.