The Central Bank of Norway has published a joint report by the Nordic central banks finding that household payments between Nordic countries remain costly despite close economic ties. Bank transfers in euros are generally cheaper than transfers in Nordic currencies, while card payment costs mainly reflect banks’ foreign exchange markups, which vary substantially across countries. EU rules limiting transfer fees explain the cost advantage of euro transfers, which applies even between Nordic countries that have not adopted the euro. From 2027, requirements for banks in Nordic countries to offer instant euro payments could also make euro transfers significantly faster than transfers in Nordic currencies. Differences in card payment markups likely reflect public measures and differing market conditions. Competition from new payment providers, including neobanks, could reduce costs over time. The report also identifies further EU or national regulation as an option for lawmakers, outside central banks’ responsibilities. Banks joining the TIPS settlement system’s service for payments between currencies could help improve Nordic payments. The service currently supports Danish kroner, Swedish kronor and euros, and the Central Bank of Norway has signed an agreement with the European Central Bank to participate in TIPS.
Central Bank of Norway report finds payments between Nordic countries remain costly for households
The Central Bank of Norway has published a joint Nordic central bank report finding that payments between Nordic countries remain costly for households, with euro transfers generally cheaper than transfers in Nordic currencies because of EU fee limits. Requirements to offer instant euro payments from 2027 could also make euro transfers significantly faster. Card payment costs mainly comprise banks’ foreign exchange markups, while competition from new providers and banks’ participation in TIPS services could help improve payments between Nordic countries.