Apple Pay in Norway

PA finance experts Thomas Bjørnstad, Knut Martin Hauge and Jesper Borgas Hansen, have had a byline article published in Finansavisen discussing Apple’s entry into the mobile payment market.

The article comments on how Apple is the first to achieve a broad consensus in the payment industry on how mobile payments should be best implemented through an improved near field communication solution. The solution, however, is based on the American payment structure which differs drastically from Norway’s and Europe’s.

The article explains that the important difference between the American and Norwegian systems is the cost per transaction. Where a store in the US typically pays around 0.5-2.5% of a card fee, a shop in Norway would pay 0.1-0.2%. This is because the US, unlike Norway, has failed to create a national payment system. In Norway, the cost to consumers and outlets is practically zero which makes the country a world leader in card use.

Thomas, Knut Martin and Jesper Borgas say: “Apple Pay is not like other Apple products because it’s a solution that is largely based on cooperation with many other players in the payments industry. In the US this cooperation is largely in place, while the opposite is true of Norway. Should Apple Pay succeed in Norway, we will see changes to the Norwegian payment industry.”

They say that BankAxept is currently at risk of being pushed out by competitors Mastercard and Visa because it does not currently support mobile payments, while other players who support payment infrastructure and processing are faced with the prospect of Apple gaining market share.

They conclude: “Attempts to establish a well-functioning mobile payment solution are nothing new – Google Wallet, PayPal, Soft Card and Valyou are all examples of initiatives that have long been trying to establish a market for iOS and Android. Apple Pay is a large step towards the future of mobile payments, but banks and stores have to learn to take advantage of opportunities to maintain their competitiveness.”

Knut Martin Hauge and Jesper Borgas Hansen are finance experts at PA Consulting Group