Consumers in Finland are strong users of payment cards, and frequency of card use is higher in Finland than in other mature European markets such as the UK and Germany.

Improved banking infrastructure, new product developments, high awareness of electronic payments, and wide acceptance of payment cards at POS terminals have been the main growth drivers.

Debit cards are the most popular card in Finland, and are used almost six times more than pay-later cards. Given their stronghold, credit card uptake has been slow. However, there has been a significant shift in product and marketing strategies in the last five years, and credit card issuers are now using initiatives to attract consumers, such as no annual fees, payment-free months, reward points, discounts at partner retailers, and cashback.

Strong e-commerce growth

E-commerce has registered robust recent growth, a trend that is expected to continue, providing growth opportunities. Contactless payments have steadily gained prominence, with all major banks offering contactless cards and mobile solutions.

Debit cards have traditionally been preferred by Finnish consumers, most of whom are banked and have at least one debit card.

Combined efforts by payment operators and government bodies in promoting cash-free transactions have accelerated debit card use. Rising use of debit cards for low-value transactions, and rising consumer preference for contactless cards are expected to drive the debit card market further over the next five years.

Pay-later cards are not popular with Finnish consumers, who tend to prefer debt-free payments and prudent spending. The availability of debit cards with credit functionality has also reduced the need for a separate credit card.

Although pay-later cards represent a small share of the Finnish payment card market, they have registered steady growth with banks promoting card use by offering cashback and reward programmes.

The Finnish e-commerce market posted a CAGR of 13.7%, increasing from €5.8bn ($7.0bn) in 2013 to $11.6bn in 2017. Growth is supported by well-developed online and logistics infrastructures.

The introduction of instant payment system Siirto for e-commerce, and the launch of international payment solutions including Apple Pay and Masterpass, are anticipated to support growth in the Finnish e-commerce market.

Finland has registered a rise in contactless adoption, with 6.5 million contactless cards in circulation at the end of 2017; this is equivalent to around two-thirds of the total payment cards in circulation in the country.

With growing consumer preference for contactless payments, all major banks now offer contactless cards, with many additionally developing contactless mobile payment solutions.