For households, it is usually less costly to make an intra-Nordic bank transfer in euro than in Nordic currencies, even between two Nordic countries that have not adopted the euro.

This ‘Nordic payment paradox’ is due to EU legislation that limits fees on transfers in euro.

Transfers in euro could also become faster

From 2027, other EU legislation could make intra-Nordic bank transfers in euro not only cheaper, but also considerably faster than transfers in Nordic currencies, as banks in the Nordic countries will be required to offer instant payments in euro.

Households’ card payment costs across the Nordics mainly consists of banks’ FX mark-ups. These mark-ups are considerably higher in some countries than others. According to the report, these differences likely reflect public intervention and differences in market conditions.

Competition may reduce costs

Over time, competition from new payment service providers, including so-called neobanks, may help lower the costs of cross-border payments in the Nordics. Legislators may also consider further regulation, at the EU or national level. Such regulation is outside of the remit of the central banks.

The TIPS system for settlement of instant payments has a cross-currency service that may improve payments across the Nordics. The service is currently provided for Danish kroner, Swedish kronor and euro, and provides an infrastructure for processing instant payments from one currency to another. Banks connecting to this service could be an important step in improving cross-border payments in the Nordics. Norges Bank has entered into an agreement with the European Central Bank to participate in TIPS.

Report

Costs of cross-border payments in the Nordics (pdf)