Nets, has published its Nordic Payment Report 2022, revealing a strong recovery for face-to-face payments, particularly in hospitality and transport sectors, as mobile payments gain ground at physical points of sale, pushing cash into third-place in terms of consumer preferences.
Physical sales locations, such as bricks-and-mortar retail and other sectors have struggled in recent years due to the pandemic and restrictions.
However, this year the physical sector bounced back strongly across the Nordic region, as customers returned to their favourite locations and started spending again.
Payment methods and related services are also continuing to adapt and evolve.
The Nordic Payment Report shares knowledge and expertise on payments and related topics within physical sales locations. It maps the Nordic consumers’ purchasing and payment method habits, using card data from our payment terminals and a large annual consumer survey.
Impressive growth in some physical categories
2022 will be a much better year for many physical points of sale than the previous years, as Nordic consumers returned after the restrictions were lifted.
However, with high energy costs, inflation and interest rate hikes, there will be a tough autumn and winter. Nonetheless, it is clear that consumers have been quick to resume their former purchasing habits following the pandemic.
Most Scandinavians were able to finally travel again, visit friends and family, go to events, shop in physical stores, as well as enjoy restaurants and cafés. All types of physical points of sale can breathe easier again – which is a good thing, since we are talking about millions of jobs across the Nordic region.
E-commerce is here to stay but have tougher times
E-commerce, which has enjoyed considerable growth for several years and did very well during the pandemic, is of course not going away. However, apart from a strong recovery in the travel sector and services such as tickets etc, online sales for products are falling.
E-commerce, in particular webshops, are currently facing headwinds. While the travel and service sectors, which suffered tremendously during the pandemic, are making a huge comeback, webshops selling products have it tougher.
This is natural following the very strong growth in recent years, and also due to the past couple of years when the pandemic forced many merchants to quickly embrace online sales.
Thus, as consumers return to physical sales locations, many webshops are seeing decreased sales.
Continued changes in payment methods
The consumers’ preferred payment methods are also continuing to change. Payment cards still very much dominate, and we see no sign of this changing any time soon.
Mobile payments are however continuing to gain ground and have now reached a milestone: the consumers prefer these more than cash in all Nordic countries.
This is even the case in Finland now, where the use of cash has dropped significantly since 2020, closing the gap on the other Nordic countries. However, Sweden is the clear leader when it comes to being less prone to using cash, though this trend seems to maybe bottoming out.
It is important to remember that the vast majority of mobile payments are card-based, even though, for example, Norwegian Vipps and Swedish Swish are used in some physical environments.
Denmark is the Nordic leader in both mobile and contactless payments. The latter payment method is becoming increasingly popular in Sweden, though saturation appears to have been reached in the other Nordic countries. The upper limit for contactless payments acts as a barrier there.
Traditional ways of shopping through separate channels are both dissolving and merging. Customer recognition, so-called tokenisation, where customers are identified by their payment method or other such as a number, offers good opportunities across both channels.
In addition, more and increased use of digital payments and increasing cross-channel integration are making more customer data available.
This presents opportunities to understand customer purchasing patterns, enabling merchants to customise for example offers and adapt their offer and services.
This means benefits for both the consumers and merchants. Consumers nowadays expect everything to function smoothly, regardless of where we buy and how we pay.
Biometrics, digital receipts and loyalty solutions
When it comes to other related payment topics, for example consumer authentication of purchases, we note some changes.
Though most consumers still prefer to use a PIN code, both contactless and some biometric solutions such as face recognition are gaining popularity.
This is because many consumers use their mobile phone to authorise payments with solutions such as Apple Pay.
Biometric solutions are thus already today a reality in physical sales locations, and are in fact more secure than using a card with PIN code.
It is also noted that there is a growing preference for digital receipts, and the majority of consumers in the Nordic region now prefer this rather than paper receipts.
But the merchants is lagging behind. The fact that not all points of sale offer these solutions, and the lack of a common system, means that there is a bit of a chicken-and-egg situation.
However at some point it will reach a tipping point and the use of digital receipts will then really take off. This will also offer multiple benefits for both consumers and retailers.
To see more Payments Statistics on the Nordics – CLICK HERE
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