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P27 Explained: Current State, Perspectives, and Impact on Businesses

Boaz Gam

Boaz Gam


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  1. What Exactly Is P27?
  2. Key Benefits of P27 for Businesses
  3. How to Prepare for the Nordic Payment Landscape Optimization?

What Is P27 and Will It Affect Your Business?

They say there is safety in numbers, meaning that uniting multiple parties is often more efficient than each of them taking action on one’s own. This principle proves to be right for a variety of niches, including the payment industry.

P27, the new Nordic payment infrastructure, is set to become yet another proof that a wise alliance can move mountains. Find out how exactly this system will function and what business owners can expect from it in this guide!

What Exactly Is P27?

What Is P27 and Will It Affect Your Business?

P27 is a real-time cross-currency Nordic payments platform that encourages collaboration rather than competition. Its aim is to offer 27 million Nordic residents a simpler way to conduct payments.

The initiative was launched in February 2018, when several financial institutions stated an ambition to create a common Nordic payment infrastructure for improved efficiency, standardization, freedom of choice, and cost optimization.

P27 is a joint project between six of the largest banks in the Nordics:

  • Danske Bank
  • Handelsbanken
  • Nordea
  • OP Financial Group
  • SEB
  • Swedbank

P27’s ownership is divided equally among these banks.

The pan-Nordic project was originally scheduled to go live in the first quarter of 2021, but the launch was delayed by COVID-19. Hence, the updated goal is for P27 to begin processing payments in 2022.

Key Benefits of P27 for Businesses

What Is P27 and Will It Affect Your Business?

The introduction of P27 is an event awaited by many in the Nordic countries, as it comes with a lot of benefits. The main advantages of this payment system are:

1. Payment Standardization

One of the key principles in P27 is to harmonize and standardize payments. Thus, when it goes live, there will be a shift from domestic clearing to Nordic clearing. This means that the local formats, such as LB, KI, or other bank-specific variants, will be replaced with ISO20022.

While an immediate return on investment is not expected, in the long run, the transfer to a standard ERP and payment processing software to automate payment processes will be beneficial for businesses, creating new opportunities for merchants to offer their products and services in new markets across the Nordics and reach more clients.

2. Reduced System Maintenance Costs

Businesses operating domestically in a Nordic country will need to make significant adjustments to their payable and receivable systems with the introduction of P27 to shift from local reporting formats.

However, despite the work that needs to be done in the beginning, the changes will lead not only to payment landscape optimization but also to a significant reduction in the operating costs for companies.

3. Fewer Bank Accounts

P27 will be extremely useful for businesses with suppliers and clients within Europe, as it will enable them to conduct supplier payments using a single account. However, note that while it will be possible to use just one account for all operations, currency conversion may remain, so many suppliers are expected to stick to local accounts even after P27 goes live.

4. Real-Time Transactions

What Is P27 and Will It Affect Your Business?

Undoubtedly, real-time cross-border payments in the Nordics are extremely beneficial for both businesses and consumers. Merchants will receive funds from their clients instantly and pay in real-time, which will give them insights into their actual financial situation and improve the control they have over it.

5. New Functionalities

Experts predict that P27 will boost the emergence of new services handled by banks or 3rd parties, focusing on:

  • Salary management
  • Single and total booking
  • Remittance information and reconciliation

In Sweden, for example, salaries are currently processed via Bankgirot, but as P27 goes live, the service is expected to close, leading to the emergence of new salary service providers.

If the forecasts prove to be correct, businesses can expect the release of advanced software with a focus on smoother and faster operations.

6. User Identification

Central P27 proxy services could evolve, impacting how a user is identified through multiple IDs. For instance, if a bank is a member of P27, SEPA, and Straks payment systems, it could reach a customer through any of the systems across the Nordics.

7. Invoicing Services

P27 comes together with request-to-pay and other invoicing services. Automating collection processes through this technology is likely to result in less delayed payments from the consumers. This is due to the fact that some customers tend to pay faster when prompted on their mobile devices.

It also is highly beneficial for utility-type payments, providing them with characteristics similar to direct debit: being pull-based, low-cost, automated, and flexible.

How to Prepare for the Nordic Payment Landscape Optimization?

What Is P27 and Will It Affect Your Business?

As you can see, P27 is expected to be a true game-changer not only for the Nordics but also for the rest of the EU. An open-access and common infrastructure is sure to bring further harmonization to the European payments landscape.

P27 is developing common Nordic standards for payments and is forecasted to boost trade, encourage business growth, improve employment rates, and build a stronger foundation for innovation.

Such major changes require careful preparation from companies. When the new payment system is launched, it’s important that you don’t get caught off-guard and have everything it takes to adjust to it. A hassle-free way of doing it involves partnering with a reliable service provider that can take care of the technical adjustments while you focus on conducting business as usual.

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