Easy payment app costs Danske Bank a fortune

Last year Danske Bank launched an app that gives users the ability to make easy bank transfers to other users – regardless of where they do their banking. The Mobilepay service has exploded in popularity, but is expensive for Danske Bank to run.

18 million kroner a year
Berlingske Business reports that the service is costing Dankse Bank a fortune. According to its report, each transaction made using the app costs Danske Bank about 1 krone. Given the fact that between 44,000 and 50,000 transactions take place every day, this puts the cost of the app for Danske Bank at close to 18 million kroner per year in banking fees alone. This comes on top of the millions it has cost to develop the technology for the app and run it.

One option could be to use Swipp, a similar technology that is preferred by some of the other banks. Swipp runs directly from the user’s bank account so it is the user who pays the charges.

Mobilepay, on the other hand, carries out the transfers as a Dankort to Dankort transaction, which means that it is Danske Bank that bears the charge.

Swipp, however, is lagging behind in popularity: it handles just 20,000 transactions per day. Danske Bank is not considering adopting the Swipp system and is instead focusing on reaching customers from other banks.

“Not big numbers for us”
“Obviously when we give something away, it costs us a bit at the other end," Jesper Nielsen, the head of business development at Danske Bank, told Berlingske

"But these are not big numbers for us, so we’ll gladly do it so that it becomes widespread, so consumers adopt the technology in big numbers. That’s the most important thing for us.”

Berlingske writes that the business plan is to start charging users who are not Danske Bank customers ten øre per transaction from 2016.