Interview with Vipps

 

The “dream” – how it all started

In 2014 a project team was established in DNB. The goal was to launch a P2P solution in the market. The target group was all Norwegian inhabitants with a Norwegian mobile phone number, a Norwegian payment card and a Norwegian bank account. We wanted to deliver a service that was as simple as sending sms, and which everyone could use anywhere, anytime and independent of who you bank with. Some of the key insights: consumers were most in need for such a service on Fridays after 21:00 because they were out with friends, family or colleagues. We knew that the consumer didn’t have cash or the eID dongle with them so the product vision was: “Sending money in 2014 should be as simple as sending sms.”

 

Product / Area of focus – to best represents Vipps work

Vipps was launched 30th of May 2015 and instantly became a huge success. In the first year, 1M consumers installed Vipps. Over 80 % was satisfied with the solution. The brand was recognized by more than 80 %, so the next question was where to focus?

Two areas that had huge potential for simplification were:

• Smaller merchants, sports clubs and associations that previously took cash for offering products and services
• Digital commerce due to the cumbersome process for both merchants and consumers

Vipps chose to simplify the payment processes for smaller merchants, sports clubs and associations because the potential was huge and the user habit was already established in sending P2P transactions to friends, family and colleagues. It was easy for both consumers and merchants to adopt this way of making payments.

In addition to our focus on making the app even better we are continuously working to get Norway even more digitized by offering the electronic ID; BankID for financial and public sector, making electronic authentication and digital signatures even more easy. In the field of electronic ID, we see high attention in Europe and around the world right now. In Norway we probably managed to create the most successful payment and ID-services in the world, and we believe it is possible to create similar successes also in other parts of the world.

 

Challenges in the geographical areas of influence

The successes of the Nordic services on payments and electronic identification have been possible through a model of collaboration. Through collaboration between banks on common infrastructure and services, common ownership and with good support from the government, services like BankID, an electronic ID used across financial and public sectors, has led to nationwide usage and contributed to a highly digitized society. The same goes for Vipps, a mobile app now used by over 75 percent of the population, working seamlessly across banks and with Norwegian banks as owners.

This model of collaboration has set the standard in the Nordic countries but not necessary in other geographies. The main challenge in the geographical areas of interest is first to promote this way of thinking, in order to pave the way for financial services as successful as in the Nordic countries, leading to nearly cashless and highly digitized societies.

 

Co-operation and partnerships

Vipps is open to co-operate and partner up with players with a collaborative mindset and that share our focus on simplification. We recently partnered up with Alipay to make it easier for Chinese tourists to pay in Norway and by this create a better offer for our merchant customers. Through this partnership we are also looking into how to create interoperability throughout Europe on inStore mobile payment using QR-codes.

In October 2018, Vipps entered into a strategic agreement with Gemalto, the world leader in digital security, to provide a secure digital turnkey solution for QR and NFC proximity payment as well as e-commerce. The new solution aims to provide secure payment services to retailers, private label issuers and domestic schemes across the world. In addition, Vipps is highly positive to partnering up with other players abroad, like governments in order to fulfil our mission on exciting people every day through world class simplification. By enabling more efficient digital and cashless societies, we believe this will contribute to economic growth and better financial inclusion.

 

Successes

The mobile app Vipps was launched in 2015, and have within four years managed to create a 75% market penetration.

In June 2018, Vipps, BankID og BankAxept merged to create the leading company within ID and payments in the Nordic.

BankID has now over 90 percent marked penetration, an electronic ID used across banks and public sector for electronic authentication and digital signatures.

BankAxept was launched in 1991 and has managed create a leading position within card payments, covering over 80 percent of all card transactions in Norway.

With these three successes, Vipps AS is today an unique combination of mobile payments, ID and payments infrastructure, not only in Norway, but also by worldwide standards.

 

About the Nordic Effort

Vipps’s vision is financial inclusion through what we call all-to-all solutions. Our success has been achieved through non-discriminating solutions that work seamlessly between all people and all banks. Money transfer between two people with two different banks and two different mobile phones is as easy as if they had the same bank and the same mobile phone. You can also use the same electronic ID to log into public services sites as you use to log into your Internet bank. To achieve this, Vipps is based upon a model of collaboration.

The field of payments and ID is a Nordic phenomenon. Banks are collaborating on common services to create interoperability between people and banks. In essence this is the reason why Norway and the Nordic region have the highest penetration and use of mobile wallets and electronic ID’s in the world. This is also one of the reasons why we are the most cashless and digitized region in the world.

By promoting collaboration we strongly believe that societies can succeed in creating world class payments- and ID services available for all, which would make a great contribution to digital inclusion.

A road towards a cashless and digitized society is also a road towards the enablement of more efficient societies, lowering the national costs associated with payments and identification and creating new opportunities for local businesses.

In Vipps we have all banks in Norway as owners, and it’s in their interest to promote the service towards their customers. This has led to a market penetration over 70% percent of the population. The same with our electronic ID which has over 90 percent market penetration.

 

The Financial Inclusion Summit takes place in Oslo, Norway, on 28 March 2019. To find out more or request an invitation, visit: https://financial-inclusion.com/#register

Follow us on @FinIncSummit #fintechforall