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P27 – Establishing a pan-Nordic payment infrastructure with instant cross-border payments as a key deliverable


On 25 June, the operational company behind Project P27 (P27), the initiative to establish a joint Nordic payment area, formally commissioned Mastercard to build and operate its clearing platform. The signing of the contract constituted a key milestone of P27 and followed an extensive process of selecting the preferred vendor and outlining the technical requirements. The new platform is scheduled to be live in early 2021 subject to regulatory approvals.

P27 is a project driven by six major Nordic banks (Danske Bank, Handelsbanken, Nordea, OP Financial Group, SEB and Swedbank). The overall vision of P27 is to create the world’s first integrated region for domestic payments in multiple currencies, that is SEK, DKK, EUR and ideally NOK, through an open access infrastructure capable of delivering state of the art payment services to customers across the Nordics. The name refers to the 27 million people who live in the Nordics.

P27 aims for consolidation of the currently fragmented clearing landscape in the Nordics with several systems in each country. Additionally, in support of the ambition to create a Nordic payment area, shared products and services should supplement the fundamental clearing layer. One example of this could be a common Nordic direct debit and/or eInvoicing solution. Importantly, P27 will be based on international standards, including the SEPA rulebooks

One concrete deliverable of P27 will be to allow for instant cross-border payments across the Nordics. In a highly integrated region as the Nordic countries, this will provide huge benefits to both consumers and businesses. This is particularly the case when such a service is supplemented by functionalities to enable interoperability between existing solutions like the current mobile payment schemes in the Nordics that are very popular, but used only domestically.

All in all, P27 is expected to bring significant value to the Nordic societies at large by fulfilling end-users’ increasing demand for instant and account to account payments. Additional benefits will come from simplified handling of cross-border payments and enhanced business opportunities owing to coming payment products and services within the Nordics. As such, P27 will contribute to further goods, services and labor market integration in the Nordic region.

For banks, the benefits of P27 will appear in the form of lower costs for clearing and related services due to larger volumes, reduced maintenance and development costs for clearing system and lower operational costs. Also, P27 will improve the foundation for banks’ innovation and development within payments, while at the same time offer many banks an opportunity to jointly upgrade their security and screening systems in line with best practice.

On the governance of P27, the six banks have established a company named P27 Nordic Payments Platform which will be responsible for the operational activities, including outsourcing towards vendors, and act as a system owner vis-á-vis authorities. P27 NPP has been registered in Sweden, but will be true Nordic company. Yet, being a Swedish aktiebolag, AB, the company should apply for a clearing license from the Swedish Financial Supervisory Authority, which is being prepared.

Another key legal entity is the Nordic Payments Council which has been established as a separate non-profit association by the Nordic bankers associations. The NPC will manage the Nordic payment schemes to be used in P27. Members of the NPC will be payment service provides that adhere to the Nordic payment schemes. Earlier in June, as another important milestone, NPC launched an open consultation on its rulebooks that will continue until 6 September, 2019.

As the immediate next steps, banks and Mastercard will now start working on the implementation which will happen in cooperation with the central banks. In parallel, P27 NPP, assisted by its owner banks, will continue its close dialogue with authorities concerning the required legal approvals and oversight arrangements. Another focus area in the months ahead will be the potential shared products and services to be offered by P27 NPP.

Anders Mølgaard Pedersen, Payments Industry Expert, Nordea & Communications for P27

Author: Kate Nelson