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A consortium of major Danish banks will partner with Nordic payments firm Nets to launch an NFC-based HCE mobile wallet across Denmark.

The consortium, called BOKIS, is made up of 62 small-to-mid-sized banks and five regional banks that account for a “significant portion” of Danish cardholders, according to Mobile Payments Today.

Denmark’s favorable environment for mobile wallets could lead to the BOKIS product’s success. 

The wallet has a huge addressable audience. 81% of Danish adults had smartphones in Q2 2015, according to eMarketer, just under half of which use the Android devices required for an HCE-based wallet. Based on the Danish population, that’s roughly 2 million people with devices that could be eligible for the wallet. And it’s likely most of those users have credit cards — in 2012, there were two payment cards per Dane, according to Ken Research — which leaves the BOKIS product with a large population to target.
Potential wallet users are already familiar with contactless payments. As of Q4 2015, Denmark had the highest number of contactless terminals and second-highest volume of contactless cards in circulation among Nordic countries, according to Research and Markets. And at least one of the major banks in the BOKIS consortium already issue contactless cards, which means that many eligible wallet users are familiar with tapping-to-pay and might be inclined to test a mobile wallet.

And a national solution could beget more promising results than phone-native products like Apple Pay, which have seen slow adoption. In the US, NFC-based terminals aren’t universal, so users often don’t use mobile wallets because they aren’t sure if a given store will accept the wallet. That will be less of an issue in a country like Denmark, with higher NFC-based penetration that will all but guarantee universal acceptance. That combined with the wallet’s integration with multiple banks and coverage of many cardholders could pose a compelling use case for tech-savvy Danes.

Mobile payments are becoming more popular, but they still face some high barriers, such as consumers’ continued loyalty to traditional payment methods and fragmented acceptance among merchants. But as loyalty programs are integrated and more consumers rely on their mobile wallets for other features like in-app payments, adoption and usage will surge over the next few years.

Evan Bakker, research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on mobile payments that forecasts the growth of in-store mobile payments in the U.S., analyzes the performance of major mobile wallets like Apple Pay, Android Pay, and Samsung Pay, and addresses the barriers holding mobile payments back as well as the benefits that will propel adoption.

Here are some key takeaways from the report:

In our latest US in-store mobile payments forecast, we find that volume will reach $75 billion this year. We expect volume to pick up significantly by 2020, reaching $503 billion. This reflects a compound annual growth rate (CAGR) of 80% between 2015 and 2020.
Consumer interest is the primary barrier to mobile payments adoption. Surveys indicate that the issue is less the mobile wallet itself and more that people remain loyal to traditional payment methods and show little enthusiasm for picking up new habits.
Integrated loyalty programs and other add-on features will be key to mobile wallets taking off. Consumers are showing interest in wallets with integrated loyalty programs. Other potential add-ons, like in-app, in-browser, and P2P payments, will also start fueling adoption. This strategy has been proved successful in China with platforms like WeChat and Alipay.

In full, the report:

Forecasts the growth of US in-store mobile payments volume and users through 2020.
Measures mobile wallet user engagement by forecasting mobile payments’ share of their annual retail spending.
Reviews the performance of major mobile wallets like Apple Pay and Samsung Pay.
Addresses the key barriers that are preventing mobile in-store payments from taking off.
Identifies the growth drivers that will ultimately carve a path for mainstream adoption.

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