The views expressed in this article are solely those of the author and should not be attributed to the European Payments Council.

Finland is a European frontrunner in payment digitalisation, with e-invoicing particularly commonplace in the country – a likely trend anticipated to happen in the rest of Europe in the next 10 years  with the recent introduction of e-receipts. 

According to statistics from Finance Finland, 85% of consumers aged 15-79 receive e-invoices through their online banking service, reducing spelling mistakes, processing costs and saving time by removing the need for the payer to key in the details of the payment in online banking. We spoke to Inkeri Tolvanen, Head of Payment Systems at Finance Finland, about the characteristics that describe the payment landscape of Finland today, the evolution of instant payments in the country, and how the sector is set to evolve in the near future.

What are the main characteristics of the current payment landscape of Finland and its recent evolution? 

The digitalisation of payments has deep roots in Finland. Common standards for file transfers, creditor references and customer reporting have been in place since the 1980s, enabling business customers to automate their processes from payment initiation to the reconciliation of incoming payments. Introduced 20 years ago, e-invoices are now part of daily life for both consumers and in B2B environments. Standardisation has provided a good foundation for payment service providers to develop innovative service offerings for their customers.

At Finance Finland, we regularly study consumer payment behaviour. According to our latest survey, 85% of consumers aged 15–79 receive e-invoices to their online bank service, where the e-invoice is, according to the choice of the payer, either automatically paid as a regular or an instant credit transfer, with the maximum amount specified by the payer, or the payer authorises each invoice separately for payment. In total, 97% of consumers prefer to pay their bills online, mainly as e-invoices or by initiating the payments with their mobile phone.  

There is a continuously growing array of payment services and payment service providers for online purchases and in-store payments. However, debit cards, preferably contactless, remain by far the most popular means of payment in e-commerce, together with credit transfers. Most Finns have one or several mobile payment applications in use and their popularity is steadily rising. Only 6% of consumers prefer to pay their daily goods with cash. 

Bank credentials are widely used for authentication in various private and public sector services including in Tax Administration and Social Insurance. 

As one of the early adopters of SEPA Instant Credit Transfer (SCT Inst), how would you describe Finland’s first few years of experience processing SCT Inst transactions?

Almost all banks in Finland adhere to the SEPA Instant Credit Transfer Scheme. However, in many banks the sending capabilities are still in the development phase. 

Finland is often considered a world leader in digitalisation and has one of the most developed card markets in the world, but the development of domestic solutions based on instant payments has progressed relatively slowly. Could you tell us about the barriers to fostering instant payments in Finland? 

The development of instant payment solutions in Finland has been met with some challenges vis-à-vis local competition law. We have several mobile solutions on the market but no solution that would be supported by all payment service providers. The Bank of Finland’s Payments Council has started a multistakeholder project for developing an instant payment solution concept to enhance instant payments. 

How do you see the Finnish payment landscape developing over the next five years?

The use of cash will continue to diminish. Instant credit transfers will become mainstream. Most payments will be mobile, whether in the form of credit transfers or card payments. 

The old proprietary e-invoice standard, Finvoice, will need to be replaced by a more modern e-invoice solution. SEPA Request-to-Pay is a potential candidate as a basis for the new solution.

E-receipts will gain ground both in the B2C and B2B contexts. The finalisation of e-receipt standards has been a part of the government-led Real-Time Economy project, which aims to enable the real-time transmission of orders, invoices, digital receipts and business data. 

Banks will need to continue to focus on security and find new ways to combat fraud and prepare for cyber risks. 

Consumers and businesses will have an ever-expanding selection of payment services, including innovative services that do not exist yet. Five years is a long time in the world of open data and abbreviations like API, AI, IoT and DLT. The introduction of a digital euro – if and when implemented – will also reshape the landscape.

Infographic: The Finnish Payment Landscape (November 2023) 
(Click to enlarge and download)