Traditional banks are still going strong in many countries, but times are changing. Payments are increasingly moving online, and new companies are offering better payment cards to their customers than traditional banks. Today, we already have more than 40 different credit cards to choose from! These new payment methods are particularly popular with young people, but older people are finding them too. Mobile banking and various online wallets are particularly useful for online payments. Linking payment cards to services will also free up the physical world to use the account.
How we make payments is changing
New payment methods in Finland are taking their time to take root, but they are already entering our market at a rapid pace. Credit cards, local and mobile payments are now pretty much part of our everyday life, but new ways have already been developed. New ways of paying may seem strange and even suspicious, or how about paying by fingertip blood vessel identification or phone ultrasound, for example? (Ilta-Sanomat 2019)
Back in 2017, the Mobile World Congress in Barcelona presented a vision for the future that would see the widespread use of biometrics for identification. A survey commissioned by Visa showed that up to 70% of Europeans would be willing to use biometrics to verify payments. MasterCard, on the other hand, has already been running a trial of Identity Check Mobile. It has enabled consumers to pay for their purchases online using biometric authentication, either with a self-service account or a fingerprint (Tossavainen 2017).
However, new payment methods, whatever their style, must still meet two of the three criteria for verified payment. These are:
Finnish consumers are interested in new payment methods
The use of cash is steadily declining in countries around Europe. In Finland for instance, they have raised the local payment limit to €50. This was already done in 2019. According to a study commissioned by Nordea bank, Finns are eager to pay by card, and at the same time there is growing interest in starting mobile payments. According to the survey, up to a quarter of Finns use their phone to pay.
There are currently several different payment methods for consumers to choose from. Many are familiar with the Danish-based MobilePay, and this is being challenged by, for example, the Finnish Siirto. Google Pay, PayPal and Apple Pay are also used by Finnish consumers. The latest innovation is the revolutionary Revolut, a true mobile bank of the new era.
Netbanking safe for both seller and buyer
Today, you can pay in many different places with your online banking IDs. Brite casino is a good example. If you play at the casino, you can make deposits and withdrawals at Brite. However, Trustly is the better known provider, but other similar services are becoming more and more popular.
The seller creates the payment details in his online shop, which the buyer sees when he accepts the payment. The buyer authenticates using a bank-provided ID before accepting the payment. The seller receives an immediate confirmation that the payment has been successful and the money is credited to his account, allowing him to deliver the product or service quickly to the buyer.
For the buyer, online payment is an easy and secure way to pay for purchases online.
Easy and fast returns
Returning products is common in online shopping, so it should also be easy and quick to return payments. With online payment, the refund functionality allows the seller to refund all or part of the buyer’s payment, even in several installments.
The seller does not need to know the buyer’s account details when making the refund, but the refund is made using the payment ID to the account from which the original payment was received.
Mobile payment is the term used for all payment methods in which a phone is used in one way or another to make a payment. So in practice it can mean paying in a shop or even transferring money to a friend via a separate app. There are already a huge number of apps and methods available today.
In principle, all of them are still based on the same thing: you first log in to the application you are using, for example with your fingerprint or ID. Then you can make the transaction yourself. The amount of the purchase is charged to your bank account, debit card, online wallet or mobile banking account.
If you have a separate phone app from which the payment is made, this is called in-app payment. Once you have downloaded the app, you will usually store some of your payment details in it. This is most commonly either a payment card or a bank account. Once the information is stored in the app, the payment is made from your card or bank account.
MobilePay is also basically such a service. Payments are made in a similar way with it. On the other hand, MobilePay is international and you can use it in any online shop. MobilePay is also convenient because it allows you to send and receive money to and from anyone using the same app with just a phone number. MobilePay works for customers of all banks.
MobilePay is currently very popular among consumers around Europe, at least based on our own team’s experience.
The most interesting mobile bank at the moment is Revolut, which is wildly popular all over Europe.
Revolut has a total of three different plans, one of which is completely free. It includes a European IBAN account, your own Revolut card and free automatic purchases up to EUR 200. The other two plans have a fee, but also offer enhanced benefits and free withdrawal limits.
Revolut is considered by users to be superior to traditional banks, as there are consistently huge benefits to be gained from using it. A savings feature called Vault rounds up purchases, with the difference between the purchase and the rounding up being transferred to savings. Revolut also has a handy budgeting tool that keeps you on top of your spending.
The new payment methods also include online wallets. PayPal is perhaps the best known to consumers so far, but Skrill and Neteller are also making inroads. As with Revolut, the use of Skrill and Neteller is growing slowly but surely.
Online wallets provide you with a convenient account to transfer money to bank accounts, pay for purchases in online shops and streaming services, and send and receive money between other users.
Opening a Skrill account is free and takes less than a few minutes. However, you will need to authenticate and make a small transaction to set up the service properly. To authenticate, you will need a passport photo and a photo of yourself showing the date the photo was taken. You will also need to transfer a small amount of money from your bank account or debit card to Skrill.
Skrill is particularly popular for its Prepaid MasterCard feature, which is also available from Revolut. Skrill MasterCard works in all the same places as a regular MasterCard. It makes sense when you travel, for example: you can transfer your travel funds from your domestic bank account to Skrill, and use your payment card at your destination. Using your Skrill card also earns you loyalty points, which entitle you to top benefits.
Neteller works in a very similar way to Skrill. There is also a dedicated payment card for Neteller customers. It’s called Net+ Prepaid MasterCad, which is linked to your Neteller account. Before you can use the MasterCard, you must have at least €10 in your account and your account must also be verified. The verification process is similar to Skrill.
PayPal is an online wallet that allows you to make payments either from payment baskets stored in your account or from a previously loaded balance. PayPal is used by many different online shops, and this is how it has become familiar to Finnish consumers over the years.
PayPal also has its own application. It allows individuals to transfer money to each other’s accounts quickly and easily. The PayPal application also makes it possible, for example, to share a restaurant bill with friends. This is done by phone number or email address.
