It’s been a nearly 15-month wait, but finally the European Commission has approved the merger of Danish digital payments app MobilePay and Norwegian smartphone digital payments app Vipps to form a new entity — “Vipps MobilePay” — effective Tuesday (Nov. 1).
The new joint venture, which extends beyond the two countries to include Lithuania and Finland, where MobilePay is also present, is expected to serve 11 million users, 400,000 merchants and facilitate 900 million transactions per year from its Oslo headquarters.
Read more: EU Approves Merger of Nordic Mobile Payments Firms MobilePay, Vipps
But while joining two strong local brands to establish a prominent Nordic and European mobile wallet gives them a strong starting point to promote further collaboration, MobilePay CEO Claus Bunkenborg is of the view that more collaboration is required to effectively take on larger international players penetrating the region.
“If the domestic wallets we have in Europe are to succeed in the long run against the big U.S. and Chinese wallets, then we need even more scale. Unfortunately, it’s not enough just to have the small Nordic countries [teaming up],” Bunkenborg told PYMNTS in an interview.
Read also: Nordic Mobile Wallets Must Collaborate to Fend off Competition From Global Players
He added that the mobile payments market in Europe needs to be more consolidated by easing the “extremely cumbersome” merger path, which will make it easier to achieve the required scale to remain competitive globally.
But as initiatives like the European Mobile Payment Systems Association (EMPSA) have proven, building interoperability and fostering collaboration among multiple payment systems across the heavily fragmented region can be a difficult undertaking.
“It’s a bit like any other European collaboration, it’s very easy to have the vision but much more difficult when you get down into the details,” he explained.
According to Bunkenborg, one of the barriers this initiative has faced is that each of EMPSA’s 16-member wallets have all been built differently, some very closely tied into the banks that they originate from, like BLIK in Poland, which primarily exists within banking apps, while others like Vipps and MobilePay run completely independently of the banks they belong to.
Read more: How Nordic Payments Megastructure Can Drive Greater Regional Integration, Harmonization
“So, it’s not just a technical [task] to bring these many wallets together. It’s also to get the corporate structures, the ownership structures, and incentives to work together, [and] somebody needs to give up something if you want to collaborate,” Bunkenborg pointed out.
The solution, he noted, lies in focusing less “on who should own what” and more on areas where payment systems can leverage each other’s strengths, whether it’s the payments infrastructure or adopting a solution where each player can still retain control and own their own customers.
However, this is easier said than done, Bunkenborg acknowledged, but he reaffirmed that letting go of individual interests will go a long way to benefit the regional payments landscape more broadly.
“People need to be a bit bolder and let go of a bit more control in order to have solutions that can be part of a bigger play across all of Europe,” he said.
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