Bank transfers between Nordic countries are often cheapest when denominated in euros
According to a joint report by the central banks of Denmark, Finland, Iceland, Norway and Sweden, cross-border payments between Nordic countries still generate significant costs for households. The report examines the costs of making bank transfers and card payments between the Nordic countries.
For households, bank transfers between two Nordic countries are typically cheaper when denominated in euros rather than in Nordic currencies, even when both of the countries have a different national currency than the euro. The reason is that European Union legislation limits the fees on transfers made in euros.
In the future, bank transfers in euros may also be faster than transfers in Nordic currencies, as the EU's instant payment regulatory requirements are to be broadened to apply also to non-euro area EU countries, such as Sweden and Denmark. In the case of cross-border card payments made in a non-euro currency, the costs to households include foreign exchange mark-ups of the card company and the banks. There are significant differences between the Nordic countries in these mark-ups of banks.
The costs of cross-border payments between Nordic countries may decrease in the future as a result of greater competition from new payment service providers and improvements in the payments infrastructure. The efficiency of cross-border payments between Nordic countries may improve, as, for example, the processing of instant payments made between euros and Swedish kronor or Danish kroner is possible with the TIPS instant payment system. The joint report focuses on the costs to households of making cross-border bank transfers and card payments between Nordic countries. The report is based mainly on publicly available information on prices and exchange rates from the banks.