Danske Bank A/S has entered into an agreement with OP Financial Group in Finland and the consortium of banks behind Vipps in Norway to merge the three mobile payment providers MobilePay, Vipps and Pivo with the aim to form a comprehensive digital wallet.

The banks behind Vipps will own 65% of the new parent company, Vipps AS, Danske Bank will own 25% and the OP Financial Group will own 10%.

The parent company, Vipps AS, will be headquartered in Oslo, and the company will be subject to supervision by the Norwegian Financial Supervisory Authorities. Rune Garborg, the current CEO of Vipps, will become the CEO of the merged business. Claus Bunkenborg, the current CEO of MobilePay, will also become a member of the executive board.

Kjerstin Braathen, current chairman of Vipps and CEO of the largest bank in Norway, DNB, will be chairman of the board of directors of the new company. Danske Bank and OP will appoint members to the board of directors corresponding to their respective ownership shares.

There will be no layoffs as a result of the merger of Vipps, MobilePay and Pivo.

All synergies from the establishment of the shared platform will be reinvested in strengthened development capabilities in order to meet the new company’s commitment to always providing the most customer-friendly payment solutions in the market.

All of MobilePay’s locations in Finland (Helsinki), Denmark (Copenhagen and Brabrand) and Lithuania (Vilnius) will continue unchanged.

The merged business will build the common technology platform starting from Vipps’ platform, which is independent from the owner banks, and runs fully in public cloud.

With a shared technical platform and strengthened development capabilities, it will be considerably easier and faster to bring new products and solutions to the market for the benefit of both personal and business customers.

In addition, these entities plan to invest heavily in e-commerce, which has been growing rapidly in recent years, and to ensure users access to mobile cross-border payments.

The merger is expected to result in a one-off gain for Danske Bank of approximately DKK 400-500 million.

The deal is conditional on approval by the relevant authorities, including the European Commission and the final approval is expected in the second half of 2021 or in early 2022.

Following the merger, the three entities will be serving 11 million users and over 330,000 merchants.

“By bringing a number of well-known brands into the ownership of a joint company, we will be strongly positioned in the market and ensure that we have the necessary scale to continue rapid growth. At the same time, we want to convey the message to other leading banks and platforms that we are open for dialogue.

 

It is especially important for us that MobilePay’s close cooperation with the other Danish banks can continue. The potential participation of other banks may further underpin the ambition to create a strong European player in the payment area,”

said Claus Bunkenborg, CEO of MobilePay and future member of the executive board of the new company.

Featured image credit: Danske Bank