The development is a blow to Nets, a Nordic payment systems provider that did an IPO in September 2016. Its shares sank as much as 6.5% on Thursday, the most since its IPO, to trade 16% below the Sept. 23 price when trading started, bloomberg.com reports.
Nordea’s customers in Denmark and Norway will be offered MobilePay and the bank will invest in the system. Nordea clients can, for now, continue using Swipp, a system Nordea had developed with more than 70 local banks.
Danske can all but remove the payments it makes to Nets for Nordea’s current customers who use MobilePay because those transactions no longer have to go via the payment provider.
Danske expects other banks in Denmark as well as in Norway and Finland to join the MobilePay partnership “in the coming quarters.” The lender is converting MobilePay into a subsidiary that will no longer carry the Danske Bank brand.
MobilePay is the third-most used app in Denmark and has been downloaded on 9 of 10 smartphones. Danske expects MobilePay will reach 180 million transactions this year with a volume of USD 6 billion.
Danske and Nordea were previously among the owners of Nets before a consortium that included private equity funds Advent International and Bain Capital bought the payment provider in March 2014.
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