Billions transferred daily

Every day, billions of kroner are transferred between accounts in Denmark. Payments must be effected quickly and securely, and citizens must have confidence in the system – both now and in future. This is vital for a well-functioning society. Ensuring secure and efficient payments is one of Danmarks Nationalbank’s main tasks.

The payments made between households and businesses every day are called retail payments. These include, for example, payments with cash or digital payments using a payment card, smartphone or a credit transfer.

Secure and efficient payments should not be taken for granted. Therefore, Danmarks Nationalbank collects statistics on and analyses retail payments in order to create an insight into and transparency in the payment market. This helps to ensure the best possible conditions for payments in Danish society.

Danmarks Nationalbank oversees the key players and central systems in the payments infrastructure and, together with the financial sector, ensures modern payment systems where daily payments take place smoothly and securely, so that Danes can easily transfer money to each other. In addition, Danmarks Nationalbank issues banknotes and coins that can be used for payments in Denmark.

Retail payments involves more than just cards and cash

Today, Danes can choose between several different solutions when making payments. In fact, most Danes have more than three payment solutions available, with payment cards, mobile payments and credit transfers being the most widespread. You can read about the most common retail payment solutions here.

What are the most commonly used payment solutions in Denmark?

Banknotes and coins constitute central bank money in physical form. Danish kroner in cash therefore represents a claim against Danmarks Nationalbank.

Debit cards are used to withdraw cash and to purchase goods and services. Payment takes place by money being debited directly from the cardholder’s bank account. The Dankort is an example of a debit card.

Payment cards that are used to purchase goods and services and possibly withdraw cash based on an overdraft facility. When using a credit card, the money is not debited from the cardholder’s account until some time after the payment has been completed, typically once a month.

The payee initiates a payment from the payer’s account based on the consent of the payer. ‘Betalingsservice’ is one example of a service where the payer can settle their recurring bills by allowing the payee to instruct their bank to collect the funds from the payer’s bank account when the recurring bill is registered with Betalingsservice.

The payer initiates the payment, which is carried out by transferring money from the payer’s bank account to the payee’s bank account. Bank account transfers are also referred to as credit transfers, and can be carried out in several different ways, for example via online and mobile banking.

The ordinary inpayment form can be used to pay bills – at post offices, in banks and via online banks. The inpayment form allows the payee to receive payment directly into their bank account.

Mobile payments are payments made using a mobile phone. The most frequently used solutions for mobile payment in Denmark are MobilePay, Apple Pay and Google Pay. The payment itself can be made in different ways, depending on which solution you are using.

What is a good means of payment – now and in future?

There are basically two different means of payment: cash and digital payments. But what makes something a good means of payment?

First, a good means of payment must meet a number of important characteristics: It must be widespread and generally accepted, so that citizens and businesses can use the means of payment to purchase a wide range of goods and services. In addition, the means of payment must have a stable value both now and in future in order to avoid uncertainty about how many goods and services you can purchase today – or tomorrow. Finally, it must be possible to use it as a unit of account to determine the prices of goods and services. This creates trust.

Trust in money has always been important for a well-functioning society. In the 19th and 20th centuries, many countries based their monetary systems on gold. This meant that the coins contained a certain amount of gold, while banknotes could be freely redeemed for gold at the country’s central bank. However, even though the system was quite different to what we know today, confidence in the system and the characteristics of gold and banknotes were in many ways similar to our current means of payment.

In recent years, the way in which we make payments and what we use to pay with have changed markedly. It is difficult to predict what the patterns of payment will look like in future. You can read more about potential new forms of digital money and get an idea of how it differs from cash and bank deposits via the link below.

Means of payments throughout history

Cash has been the most important means of payment in Denmark well into the 20th century. Since then, things have developed rapidly, particularly within digital payment solutions. Photo: Steen Jespersen/Ritzau Scanpix