Leveraging Nordic Payments Against Dominant Banks


They may be small and each with a population of less than 6 million, but countries in the Nordic region like Norway, Denmark and Finland are world leaders in innovation, with some of the infrastructure most advanced banks in the world.

Banks in the region have played a dominant role in this technological development, investing heavily over the decades in modern clearing and settlement systems, as well as various initiatives such as bank-backed mobile wallets, digital bank IDs and payment infrastructure.

Since then, this solid infrastructure and payment rails have made it easier for FinTech companies such as Lunar grow rapidly in the region.

“When we started the business in 2015, the Nordics already had a mobile banking adoption rate of over 90%, [which gave us an advantage over] other challenger banks that were going to live in other European territories,” Ken Villum Klausenfounder and CEO of the company, told PYMNTS in a recent interview.

Today, the Danish FinTech company has become a regional heavyweight with more than 500,000 customers in Denmark, Sweden and Norway, recently closing a $76 million (€70 million) funding round that raised its Series D total at $306 million (€280 million).

Read more: Lunar digital bank raises $76 million

While the Scandinavian company has a banking license, offers deposits and accounts and has been able to establish itself as a challenger bank in Denmark – while most consumers already use the digital banking services provided by the main local provider of mobile payment, MobilePay – Klausen said they have broader ambitions beyond banking.

“We don’t really identify as a bank,” he said. “We see ourselves building more of an engagement platform for all things money – a platform where you can manage all aspects of your business, whether savings or accounts, or payments or access to cryptographic space, or stock market transactions and even [B2B] Payments.”

In October last year, the company acquired the Paylike payment platform to enable Lunar’s business customers to receive e-commerce payments directly, launching one-click payment for entrepreneurs and its small and medium-sized businesses. (SME) e-commerce.

See also: Digital banking Payment platform Lunar Snags Paylike

Since then, 50% of all newly created Danish businesses apply for a Lunar account, according to Klausen – an indication of the solution’s growing popularity among businesses and customers.

“It’s an advantage to be on a smaller territory, we can develop equally on both sides [B2C and B2B] and then we can connect the two with beneficial USPs [unique selling points] on both sides of the table. That’s really the long-term plan for the lunar flywheel,” Klausen added.

Crypto, competing with incumbents

As part of its expansion plans, the Danish company recently launched a cryptocurrency platform to capitalize on the growing popularity of digital currency among consumers in the region.

“If we go to the app stores, iOS and Android, and look at the most popular apps in the finance category, a lot of those apps are crypto platforms outside of the Nordics, [and] people living [there] operate these platforms because they want to get into crypto,” Klausen noted.

However, although cryptocurrency is becoming more and more common in the region, Nordic banks do not allow customers to transfer products from crypto platforms to their bank accounts, given the lack of transparency and clarity. surrounding the source of funds and tax payments.

That’s why Klausen said he built a platform within the Lunar app where users can buy, hold, and sell cryptocurrency, giving Lunar full control over knowledge checks of your client (KYC) and transaction monitoring as user funds flow in and out. of the crypto platform.

“In many ways, it’s a great example of Lunar’s position at the intersection of the old world of finance and the new world. [and] solve a huge problem for users, which is investing in crypto if you feel like it, but also being able to exchange money for fiat or just use them on your card,” he explained.

Related: Lunar Way raises 13 million euros to finance its growth

Looking ahead, Klausen said he feels like he’s only scratched the surface given the “massive opportunities” in payments, investment banking and cryptocurrency in the region, including in Finland, so they will focus on regional expansion for now before considering opportunities beyond the Nordics.

And with the incumbents consistently dominating the region’s banking space, Lunar will need to up its game to compete effectively.

“If we look at this from a long-term perspective, I think we’re competing in probably the toughest financial services landscape in the world, where the incumbents are doing a really great job, [and] this means that Lunar must be above everyone else to compete with the titular ones [banks]“, said Klausen.

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On: Forty-two percent of US consumers are more likely to open accounts with financial institutions that facilitate automatic sharing of their bank details upon sign-up. The PYMNTS study Account opening and loan management in the digital environmentsurveyed 2,300 consumers to explore how FIs can leverage open banking to engage customers and create a better account opening experience.


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