Better business payments across Danish borders

Banking Circle Group CEO Anders la Cour discusses breakthroughs making Denmark payments faster and cheaper, and highlights the obstacles yet to be overcome

Many smaller markets have traditionally suffered slow settlement times, high costs and poor service for business payments. Denmark is one region that has been disadvantaged in this way - despite being a wealthy country with a sophisticated economy, leading the way in many payment initiatives including P27 to support instant payments across Denmark, Finland and Sweden.

Danish Krone (DKK) payments into and out of Denmark can be expensive and slow, excluding many businesses from trading across Danish borders. 

According to a recent survey from the Danish Central Bank, the total cost of payments in the country is around 0.8% of GDP, with B2B transactions accounting for 27% of this total, totalling DKK 4.2bn (US$641mn). Settlement in and out of DKK takes between two and five days, depending on the currency pair and banking relationships involved. 

Simplifying cross-border DKK e-commerce

But things are changing. Intradagclearing – the Danish National Intraday Clearing System – means non-Danish Banks, Payments businesses and online marketplaces can now trade with Denmark more easily. In partnership with the Danish Central Bank, Banking Circle joined Intradagclearing in 2021 to help non-Danish Banks, Payment Service Providers and Marketplaces increase access to the Danish market for their e-commerce customers. 

The latest Banking Circle white paper - Payments without barriers: Focus on Denmark– examines the breakthroughs in clearing and settlement that are set to improve payments for businesses trading with Denmark. However, it also highlights that there are still barriers to overcome. 

In terms of e-commerce, within Europe Denmark is second only to the UK in terms of the percentage of people who shop online – in 2020 alone, e-business grew more than 20% and the total volume of digital commerce increased by close to 30%. Digital transformation of Denmark’s payment infrastructure is well underway, but slow and expensive cross-border DKK settlements are hampering growth and holding Danish businesses back from their full potential. 

Looking to the future

Banking Circle joined the Intradagclearing system because we believe 

this development will have a positive effect on cross-border e-commerce. Our mission is to provide Banks, Payments businesses and online marketplaces with solutions that make local and cross-border payments accessible, efficient and cost-effective for businesses of all sizes and in any geography. With direct clearing access integrated into our cloud-based payments infrastructure, and our connection to the Danish Central Bank, Banks, Payments businesses and marketplaces outside Denmark benefit from lower costs and faster settlement times. 

For Banking Circle clients and their underlying customers, transactions occur as if they were local payments, reducing friction and delays. Cutting out the traditional reliance on the slow and costly international correspondent banking network, the new solution is helping cross-border e-commerce businesses to accelerate their growth within Denmark.

You can download the white paper on bankingcircle.com

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