From Vipps in Norway and MobilePay in Denmark to Sweden’s mobile payment system Swish and mobile payment app Pivo in Finland, payment methods that facilitate fast and convenient ways to pay are gaining traction in the Nordic countries, a well-known region for its innovative payments and digital banking services. .
Read more: Klarna’s global merchandise volume jumped 42% in 21 as US users increase 71%
The adoption of deferred payment options in countries in the region has also contributed to the rapid growth of global companies such as Swedish buy-it-now, pay-later (BNPL) giant Klarna, which has recorded an increase of 42% in global transaction volume and a 38% increase in transaction volume. worldwide net operating income in 2021 compared to 2020 figures.
“What we see is that the invoice and deferred payment options are [still] don’t lose because consumers like it, it’s very flexible and [offers] a secure means of payment. You can get your goods first, then pay [later]Mikael Johansson, managing director of Stockholm-based FinTech Avarda, told PYMNTS in a recent interview.
Avarda, which sees itself as a challenger to Klarna, is also well known in the region for its white label payment solutions – Pay-by-bank and Buy Now, Pay Later options – used by several merchants in Sweden, Norway, in Denmark and Finland. , Estonia, Latvia, Lithuania and Poland where the company operates.
“Our offer is somewhat different from most of our competitors in the Nordic countries. We are not just a payment company, [we] have built a model based on microservices [so] we can tailor the customer journey and flows in a different way than our competitors,” Johansson said. “We work with the merchant to create a checkout journey and customer journey that matches the individual merchant and the type of products they sell.”
Since its launch in 2015, the FinTech company, which is wholly owned by Swedish bank TF Bank AB, has grown significantly, with revenues jumping 38% in 2021. And given that local Swedish retailers like the fashion market in line Boozt have ditched Klarna for Avarda’s payment solution, it looks like the company is well-equipped to take on the global giant.
Open bank payment
To enhance its offering for retailers and merchants, the Nordic-based payment service provider recently partnered with European open banking player Aiia, a Mastercard company, to enable bank payments opened via its white label payment solutions.
As part of the agreement, Aiia will enhance Avarda’s BNPL solution based on account-to-account payments, allowing consumers to make deferred payments without having to separately log into an external banking login or application. According to Johansson, this goes a long way to increasing conversion rates and reducing friction in the checkout process.
Read also: Mastercard’s Aiia Powers New Platform to Bring Open Banking to the Masses in Denmark
“Previously, when you paid a bill, you had to enter lots of numbers and bank details. It wasn’t very practical. [With] this service, paying the deferred payment or the bill is extremely fast and convenient, and you don’t need to have a lot of data on your phone,” he explained.
In addition to this, customers can use Pay-by-bank to pay their BNPL bills or installments using a new billing feature that updates customers’ bill balance in real time when a payment is made. is made or a refund is received, Eeva-Liisa Marjomaa, Avarda’s head of development, added.
Customers can also authenticate and authorize payment with just a few clicks without having to share confidential information with a third party. “Avarda believes that payments should be easy, fast and secure, whether you pay at checkout or choose to pay at a later date,” Marjomaa said.
Looking ahead, Johansson said the company has aggressive growth targets to continue on the growth path while continuing to develop products and services that help merchants build customer and brand loyalty, as well as to increase their redemption rates.
“Day by day we see more and more merchants are interested in our products, so we have plenty of opportunities for growth with our current products,” Johansson said. “We are very optimistic for the future and we will continue with very strong growth in the future.”
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