P27 Full Speed Ahead With Transformation Projects In Sweden, Denmark

November 16, 2021
Transformation programmes that enable a pan-Nordic multi-currency platform are moving ahead with full speed in Sweden and Denmark following EU merger clearance.

  • EU approval milestone in project’s progress
  • Rollout of first currency and scheme still “extremely far”
  • Norway yet to decide whether to join system

Transformation programmes that enable a pan-Nordic multi-currency platform are moving ahead with full speed in Sweden and Denmark following EU merger clearance.

P27 is moving on with its plans to launch a new payments platform and has started to take concrete steps forward, Martin Georgzen, chief strategy officer at the P27 Nordic Payments Platform, has revealed.

The new pan-Nordic payments platform is being rolled out on a modular basis, including different currency modules, as well as batch and instant payments systems.

Most of the platforms that the Nordic company plans have now been ordered and under production in preparation for rollout, Georgzen said at a NextGen Nordics webinar.

Throughout the last year and a half, the Nordic company has also constructed two data centres in the region that will be used for P27.

These actions followed a July decision by the European Commission which gave P27 the green light to go ahead with the acquisition of Sweden’s legacy payment system provider Bankgirot.

Georgzen stressed that the EU approval has been an extremely important milestone for the project as, on one hand, it meant that it can move forward with the migration and integration of Bankgirot, which is a key part in the creation of the new payment platform.

On the other hand, the European Commission gave a nod to P27’s proposed commercial model from a competition law perspective, which allows P27 to start signing agreements with clients and bringing products to the Nordic market.

“That was an important milestone for us to be able to proceed and implement the Swedish krona batch in a stable and secure way,” according to Georgzen.

In Sweden, P27 is accelerating the transformation plan already in place with the Swedish Bankers Association, while in Denmark, the company has moved on with a transformation and migration programme.

P27 is now preparing to bring out the schemes that have been ordered, Georgzen said, adding that it has a project that is about to take full speed in Denmark.

However, he noted that it is “extremely far” in the preparations for the Swedish krona instant payments when it comes to the mobile payments model.

Although P27 is in close collaboration with regulators, central banks and market participants in Sweden and Denmark, it will only roll out the first currency and scheme after these countries’ settlement systems have been modernised.

For example, the Riksbank is currently planning to introduce RIX-Inst, an instant settlement system for retail payments that will be the settlement infrastructure for mobile payment solution Swish and future P27 services in Sweden. The RIX-INST service, based on the European Central Bank’s TIPS Platform (Target Instant Payment Settlement), will enable 24/7 immediate settlement in central bank money, all year round.

Although Sweden and Denmark are quite advanced in terms of key decisions being made, there is less progress in the other two Nordic countries, Georgzen said.

In Finland, it is “very much up to the banks’ priorities about when and how we should do that”.

Although banks are showing “a very big interest” to enable euro instant payments first, P27 is now focusing on the currency and scheme rollout. Nonetheless, “it will come, it is just the matter of when”, Georgzen assured.

Norway no show

P27 was named after the 27m people that live in Sweden, Denmark, Finland and Norway. However, shortly after the formation of P27, Norway’s largest bank, DNB, pulled out of the project, leaving Norway without any representation. Then, the board of Norway’s bank association, Finance Norway, stopped evaluating P27 as an option for the Norwegian banking community.

Georgzen noted, however, that it is having a very good dialogue with the Norwegian sector. “It is a decision for Norway to make, if they find P27 attractive enough, and it is up to us to make it attractive enough for the Norwegian community.”

“We can definitely take onboard Norwegian krone when the time is right and if that decision is being made in Norway, but we will take it step by step,” he added.

The goal of the project is to make P27 the “Starbucks for payments” in the Nordic region, said Adrian Mountstephens, head of payments and banking ecosystems, EMEA, at Equinix, the company that hosts many of the data centres for real-time payments infrastructures.

“What we want with P27 is that you can pull out a digital app on your phone and no matter what country you are in, you can make a payment, go into a bank in any of these four countries, and get the same payments service with the same cross-border capabilities,” he explained.

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