MobilePay is a mobile payment application that began in Denmark. As cash use decreases in Nordic countries, digital payment solutions such as MobilePay enable convenient contactless payments in store and online. Businesses that accept MobilePay can create a faster, more secure checkout process while demonstrating to customers that they understand the local market.

In 2022, MobilePay merged with Vipps, a Norwegian digital wallet, to form the parent company Vipps MobilePay. In 2023, the 2 apps collectively had 12 million users and facilitated over 1.2 billion transactions across the Nordics.

This guide will cover how MobilePay works, where it’s used, and how businesses can start accepting MobilePay transactions.

What’s in this article?

• How does MobilePay work?
  
• Where is MobilePay used?
  
• Who uses MobilePay?
  
• Benefits of accepting MobilePay
  
• MobilePay security
  
• Accepting MobilePay as a payment method
  
• Alternatives to MobilePay
  

How does MobilePay work?

Like a digital wallet, MobilePay allows shoppers to quickly pay for purchases with a credit or debit card by verifying transactions through a mobile app. Users download the MobilePay app on their phones and register by linking their mobile numbers to a bank account or payment card. They will typically need to enter personal details such as a phone number and bank account information, and then verify their identities through SMS, email, or a digital ID.

MobilePay enables peer-to-peer transfers, allowing users to send or accept funds using their phone numbers. The app sends the recipient a notification to approve the request.

For in-person payments, customers scan a QR code generated by the business, then MobilePay opens and asks the customer to approve the payment. After the customer does so, the app shows them an order confirmation.

For online payments, MobilePay redirects customers from the business’s website to the app, where they can authorize the payment. MobilePay then sends the card data to the business’s payment gateway to complete the transaction. Certain cards or banks might require an additional card authentication step to process the MobilePay transaction.

Where is MobilePay used?

MobilePay is a mainstay of the Nordic payments market, where cashless payments are the norm. It primarily serves Denmark and Finland. Danske Bank first launched MobilePay in Denmark in 2013, and it entered the Finnish market soon after. MobilePay later launched in Greenland in 2020. By 2022, MobilePay had 4.43 million users in Denmark and 2 million in Finland.

Who uses MobilePay?

While people of all ages use MobilePay, the app is especially popular among younger people with 99% of Danish people ages 20–39 using the app as of October 2022.

On the business side, these types of businesses and institutions accept this payment method:

• Ecommerce businesses: Online businesses ranging from small operations to large corporations integrate MobilePay into their checkout processes to give customers a quick, contactless payment option.

• Ecommerce platforms: Ecommerce platforms such as Shopify and Shopware accept MobilePay as a payment option.

• Brick-and-mortar shops: Retailers with physical stores use MobilePay to collect in-store payments using QR codes.

• Subscription businesses: Businesses using a subscription model allow customers to make recurring payments through MobilePay.

• Nonprofits: Nonprofit organizations and charities collect donations through MobilePay so that people can donate spontaneously.

• Event organizers: Fairs, markets, and entertainment event organizers use MobilePay to handle ticket and merchandise sales.

• Educational institutions: Many schools accept MobilePay for payments related to school activities, meals, and fundraisers.

Benefits of accepting MobilePay

Accepting MobilePay provides multiple benefits to businesses in the Nordic markets, where it’s widely used. Here’s how businesses can benefit:

• Faster transactions: MobilePay reduces wait times at checkout and can improve the customer experience.

• Higher conversion rates: Accepting MobilePay can help generate more sales. Online marketplace HandyHand reported 10%–20% higher conversion rates after integrating MobilePay payments through Stripe.

• Better cash flow: MobilePay quickly transfers payments to the business’s bank account.

• Real-time reporting: Businesses can track payments in real time for insight into daily sales and financial planning.

• Secure transactions: MobilePay uses strong encryption and security protocols to reduce the risk of fraud.

• Competitive advantage: Businesses that adopt MobilePay can differentiate themselves from competitors that use less popular payment methods in the Nordic region.

• Loyalty integration: Loyalty programs can integrate with MobilePay to let customers earn and redeem rewards during the payment process.

MobilePay security

Here are MobilePay’s key security features.

• Payment authorization: The user must authorize every MobilePay transaction. The app also requires the user to verify their identity through a PIN or fingerprint when logging into their account, which reduces the risk of fraudulent transactions.

• Encryption: MobileApp encrypts the sensitive data transmitted between the user’s device and its servers. It uses industry-standard encryption protocols such as Transport Layer Security (TLS). This ensures that fraudulent actors can’t use any intercepted personal and financial information.

• Automated fraud detection: Advanced algorithms detect potential fraudulent transactions. If MobilePay detects suspicious activity such as increased spending volume from a particular user, it will temporarily block the transaction or account until the user verifies the activity.

• Regulatory compliance: MobilePay complies with the European Union’s General Data Protection Regulation (GDPR) and revised Payment Services Directive (PSD2) to securely handle users’ personal data and electronic payments. These requirements include implementing Strong Customer Authentication (SCA) protocols and keeping the minimum amount of personal data required to complete transactions.

Accepting MobilePay as a payment method

Businesses that want to accept MobilePay should first ensure they don’t belong to one of MobilePay’s prohibited business categories, such as adult entertainment and cryptocurrency trading companies. Eligible businesses can sign up on the MobilePay website.

To integrate a MobilePay account with a payment service provider or ecommerce platform, a business typically must go to the platform’s settings, find where it manages payments, and add MobilePay as a payment method. If the business is using Stripe, it can simply go to its Stripe Dashboard and enable MobilePay. If the business uses Stripe products such as Connect, Stripe automatically determines the most relevant payment methods to display to customers, which might include MobilePay.

MobilePay charges a fixed monthly membership fee to businesses registered in Denmark that use its services. Stripe bills this monthly fee by deducting the amount from the business’s Stripe balance.

Alternatives to MobilePay

There are several popular alternatives to MobilePay, each with similar mobile payment services customized for different markets and user needs.

• Apple Pay: Apple Pay allows users to make contactless payments with their Apple devices. It uses Face ID, Touch ID, and device-specific codes for authentication, as well as tokenization for transaction security. However, the fact that Apple Pay is only available on Apple devices limits its reach compared to competitors such as Google Pay and PayPal.

• Google Pay: Google Pay allows users to make payments through their smartphones or other devices with near-field communication (NFC) capabilities. Google Pay uses multilayered security, including encryption, tokenization, and biometric or PIN-based authentication.

• Swish: Swish is a Swedish mobile payment solution that enables both peer-to-peer transfers and payments to businesses. It’s integrated with Swedish banks and supports real-time payments. Swish uses BankID for secure authentication to keep transactions safe and verified.

• Vipps: Vipps is a Norwegian payment method that supports peer-to-peer transfers and payments to businesses. It uses strong authentication methods including BankID for secure transactions. Accepting Vipps can help businesses broaden their appeal in the Norwegian market.

• PayPal: PayPal handles online payments and peer-to-peer transfers internationally. Its mobile app allows users to pay in store, send money, and manage their accounts. PayPal is a useful payment method for businesses looking to accept international payments.