Danske Bank Concedes the Field in Norway

We knew that, as a market matures, we inevitably see firms depart the field, and merger and acquisition events take place. Proof of that can readily be seen in a recent move from Denmark’s Danske Bank, who shut down its MobilePay operations in the country, and instead moved to back a competitor’s application instead.

Now, Danske Bank will be putting its resources behind Norwegian mobile payment app Vipps, offering up its own distribution capabilities in a set of discussions that the two firms are, at last report, looking to “finalize as soon as possible.”

Vipps has been in active competition with MobilePay for the last two years, but a deal between DNB and over 100 different local banks prompted Vipps to spin off, which led to it gaining ground in the field. Those gains became even more substantial after Vipps took over mCash and its market accordingly. Further gains for Vipps came after Nordea, another bank in the region, announced plans to back Vipps as well, giving MobilePay much less room to operate in. Nordea had been working with MobilePay previously, but transferred its flag after finding its customers preferred Vipps.

Rune Garborg, current head of Vipps, noted that this represented “…a consolidation of the market for mobile payments.” He also expressed satisfaction at seeing banks that operated in Norway were coming together around a common solution. That it was his solution they were coming together around may have had something to do with his satisfaction.

Yet Garborg’s right here; the mobile payments market is starting, at least somewhat, to consolidate. There have been a lot of firms entering the field in the last three years, and a bare handful exiting. We still see some new entrants stepping in, even now, but we’re also starting to see more firms depart. That’s the inevitable state of a maturing market: some firms just can’t compete, so we see mergers, consolidations, and market departures to make way for more successful firms.

Mobile payments are becoming a mature market, and that’s a development that means we’ll have these options around for some time to come.