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Mobile Payments In The Nordics And Baltics


When I first moved to Finland three years ago, I remember seeing a Coke machine at the university that accepted payments over the phone. All you had to do was call up the phone number, type in the machine's ID, and then the machine was credited and you'd find the slightly more expensive coke on your phone bill. I thought it was pretty cool and I mentioned it to my Finnish friend in passing, and the response I got was something like "Yeah, I think we've had that since the 90's."

It seems like Finland and the rest of the Nordic and Baltic countries are ahead of the curve when it comes to mobile payments being accepted in society, but there still is a long way to go before I can stop carrying my wallet around. There's a lot of companies to take a look at, so here are a few that have come up on our radar.

Accumulate:
Accumulate out of Sweden, recently came out with several announcements worth noting. The company is building a mobile financial services platform, called Mobile Everywhere, and just announced a new mobile wallet service that will be available to 97% of all mobile phone users in Sweden. The mobile wallet venture, dubbed WyWallet, has been put together in conjunction with the four largest mobile network operators in Sweden, including Telia, Tele2, Telenor and 3.

The platform is technology agnostic, so any pairing technology used at a payment transaction is supported, like NFC built-in mobile, RFID, Accumulate OTT, QR- and bar codes, etc. Also, a mobile payment service based on the Accumulate platform support all payment situations and more; POS, online, person-to-person, man-to-machine (ex. vending, mParking), in-app purchase, remittance, and so on. The company points out that several Samsung phones offer NFC already, and the Nokia Windows 8 phones will also support the technology.

In December Accumulate ran a NFC beta test in Stockholm for Paypal at two retailers using passive NFC stickers, and their focus on NFC seems to support that they thing it's a good step forward. It is unclear what Accumulate's relationship  is with Paypal at this day, considering they are building their own mobile wallet platform.

This mobile wallet system also plugs into Accumulate's mobile merchant app that requires no special hardware or additions, and can run on any Android, iPhone and iPad. Purchases through the system are made as a money transfer and are authenticated by Accumulate's One-Time-Tickets. The mobile merchant app is in their strategy to plug into all mobile payment solutions, from point of sale situations, online payments, and man-to-machine payments.

mCASH
mCASH out of Norway is another mobile payments provider worth keeping an eye on. In June, their Facebook page gives this news:

mCASH is being made available in the Point Of Sale Software offered by Lindbak Retail Systems. Lindbak is one of the leading providers of POS solutions in Norway and Sweden. Lindbak is implementing the full range of mCASH technologies enabling their customers to tap into features such as mCASH Payments, electronic receipts, loyalty, business intelligence and more.

Thus mCASH is available to Merchants such as XXL Sport, G Sport, InterSport, Deli De Luca, Coop, Vinmonopolet. Just to mention a few.


Their iPhone app is currently in beta testing. We covered them last November, but I get the impression that they have cut down a number of their features to focus on their core product.

MobileAxept
Here's another Norwegian company we gave some coverage to way back in 2009, but is still alive and kicking. MobileAxept was founded in 2003 and provides a SMS based payment solution for retail and donations. Users must first register with MobileAxept, either online or by text, and then further payments can be accepted by text message. The company takes a 3% cut of transactions.

Judging from their website, they seem to be getting most of their traction on the donation front, with a good couple churches in the United States using it as a method to accept offerings. I suppose now it's no longer in bad taste to pull out your phone during services.

ERPLY
In Estonia, ERPLY, the provider of a cloud-based POS system, has partnered with Paypal to integrate mobile payments into its system. Consumers wishing to use the payment method will need to download the PayPal iPhone app. The solution allows customers to simply "check in" to a store when entering, then pay with Paypal at the checkout counter.

The solution also gives the opportunity to run different services, like customized offers and loyalty programs. The checkout process only requires the cashier to match the name and photo of a customer, which will likely give a quick transaction at the register. Funds are then made instantly available in the retailer’s PayPal account.

Mokipay
This Lithuanian startup seems to have a pretty solid penetration in their home country already. Mokipay uses a sticker with a Near Field Communication (NFC) chip that attaches to the back of a smart or dumb phone, which can be read by a Mokipay reader. Payments can be accepted in 150 places in Vilnius, and 70 locations in Kaunas, with many more spread out across Lithuania.

For smartphones, Mokipay functions as a mobile wallet and a loyalty card for services of partners. They are also developing the app to act an access control card (to enter buildings using NFC), an e-ticket for public transport, a city guide, and a budget management tool. Their about page says the functionality of Mokipay service is being constantly expanded. Our past coverage goes into more detail about the service.

Eskimi
The Lithuanian social network targeted at feature phones is also experimenting with payments these days. Eskimi has seen the majority of its users come from Africa, mostly from Nigeria. The country is still experiencing rapid inflation, and the government has been seriously promoting alternative payment solutions to reduce the demand of printed money, which is difficult and costly to continuously reprint and update.

Eskimi has now partnered with Mobile Money operators in Nigeria by helping them with user acquisition. It will be interesting to see how they expand on this front, as social networks can easily provide the user base and platform for payments. In our last Unfair Advantage episode, we talked to CEO Vytas Paukštys of Eskimi about this in more detail.

Apple
It appears two Finnish inventors, Janne Aaltonen and Sami Saru of Turku Finland, have sold their mobile wallet patent to Apple recently. The system allows for both payment and issuance of coupons, vouchers, or credits. This well written Quora post is worth taking a look at if you're interested getting some insight to what Apple may be working on.

Mobile payments seem to incur higher transaction costs through these startups, but retailers get the benefit of taking on promotions and better tracking and insight on their customers. Ultimately, for consumers these mobile payment systems have to prove themselves to be faster and easier than credit cards and cash, otherwise what's the real benefit aside from the occasional coupon or discount?

Everyone likes carrying a credit card around because now you can walk around without cash, but I think these mobile wallets will have a hard time replacing cards and cash until battery life is severely increased on smartphones. My iPhone lasts well under a day with moderate use, and currently I get anxious enough as is when my battery life drops below 30%. I can't imagine relying on my phone for buying food when my wallet can just turn itself off.

That being said, it's inevitable some sort of mobile payment solution will eventually become standard, and perhaps we're seeing it in its infancy right now in the Nordics and Baltics.

Top image by whiteafrican on Flickr

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