Finland is quickly becoming one of the most digitalized payment markets globally. The Bank of Finland predicts that by 2029, the country will be completely cashless which takes Nordic nation on a way to a brilliant future of money. So let’s consider what factors helped Finland become a pioneer in this sphere and what consequences for consumers and business it has.

The Digital Shift

Statistical data help to see how deeply digital payments penetrated into the Finnish everyday life. Since 2010 the number of bank branches fell by a half in that country and there were no new ATMs installed in the past few years. These figures do not indicate a lack of financial stability but show that the society has already left traditional banking solutions far behind.

Contactless technology adoption has been a major force with card use leading the way. Between 2014-2015, the number of contactless cards in circulation surged by as much as 111%, reaching four million. Surprisingly, the billed volume on these cards exploded by 667% and transactions rose by 720% to reach 29 million. These are not just small changes but they illustrate a large change in how Finns do their daily business.

A Nation of Card Users

Usage of payment cards in Finland has achieved the highest rates. In 2016, Finns used 1.5 billion payment cards—an average of 329 transactions per adult a year. This results in the usual Finnish adult almost using his/her card once every day, a frequency that a generation back would be considered unimaginable.

Debit Cards Reign Supreme

Finnish consumers have a clear favorite in the payment preference: debit card. These account for approximately 80 percent of card purchases by volume, with an average transaction value of just $29. The modest nature of this figure also gives you an idea that Finns do not use cards only for big-ticket items.

It is notable how they prefer their debit cards for simple transactions such as buying a coffee, shopping at a grocery store or even taking a quick lunch at work. The fact that card payments are the norm even for small-value transactions is what defines a complete digital payment culture.

However, credit cards have their share of problems. In a loan market that is already developed and where debit cards are more popular than ever, credit card issuers find it difficult to make their products stand out. Credit card ownership remains relatively low since procuring one largely depends on an individual’s multifaceted financial institution relationship and not solely on standalone product features.

Merchant and Consumer Satisfaction

Probably the most impressive feature of Finland’s payments journey is the mutual consent this journey has managed to reach. Remarkably 88% of merchants and 91% of consumers express satisfaction with payment methods available today. It’s very important for functionality—it means that digital transformation isn’t imposed on those who don’t want it, but rather acts organically to meet existing market needs.

Both the groups are similar as they have less inclination to use cash. Finnish traders and consumers also have the same sentiment about paper currency, which is not currently observed in most other developed markets, making it a virtuous cycle where digital preference on one side reinforces adoption on the other side.

What This Means for the Future

Finland is a role model that other countries can emulate when creating their own vision of a digital payment system. While 2029 is the projected year of a total Finnish cashless society, it goes beyond mere predictions and is now a foregone conclusion based on current trends.

With unmatched customer satisfaction, high number of merchants and a population that is successfully conducting business through digital means including small transactions, Finland is already showing the world that a cashless economy is not just a concept in the future—it is the impending reality.

As Finland stays on track, it will be most likely be used as a role model for more nations to follow suit. The success factors – investment in the infrastructure, merchant solidarity, consumer education and regulation support – are the key points for those who are already prepared to adopt the future of payments.