General overview of the bank payments infrastructure in Denmark

In Denmark, various types of push and pull-based payments are available to individuals and businesses. Push payments include Danish account-to-account transfers (next-day payments, same-day payments and instant payments), FIK payments, NemKonto payments, and MobilePay. On the other hand, pull payments are facilitated through the Betalingsservice and Leverandørservice direct debit schemes.

Payments must be sent in DKK between accounts domiciled in Denmark to leverage domestic schemes. Hence, to access local rails as a business, you need to open a DKK account with a local bank or an international bank with a Danish branch. Get in touch here for recommendations & introductions to banks. 

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What do Danish bank account numbers look like? 

A bank account number is 14 digits long, with the first four digits indicating the bank registration number while the remaining ten digits represent the account number. If the bank registration number or the account number is shorter than the prescribed length, it must be right-aligned and padded with leading zeroes to ensure the total sum remains 14 digits long. As an example, 23230012345678, where 2323 is the bank registration number and 12345678 is the account number which is padded with zeroes.

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Clearing and settlements

Sumclearing, Intradagclearing, and Straksclearing are responsible for clearing payments between banks, where the final transfer of money between the banks is executed through Kronos2.

Kronos2 is Danmarks Nationalbank's Real-Time Gross Settlement (RTGS) system for payments in Danish kroner (DKK). This system is primarily used to settle large-value, time-critical interbank payments. Most banks in Denmark hold accounts at Danmarks Nationalbank to settle interbank obligations. Apart from interbank payments, Kronos2 also settles monetary policy operations and net positions from other connected payment and settlement systems.

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Payment methods in Denmark

Credit Transfers

Danish account-to-account (A2A) payments

Account-to-account (A2A) payments have experienced a surge in popularity in recent years, especially thanks to Open Banking initiatives. Essentially, A2A payments involve directly transferring funds from the payer's bank to the recipient's bank without intermediaries.

Account-to-account transfers can occur within seconds with express transfers in the form of instant payments. This has been possible since 2014 when 'Straksclearing', an immediate credit transfer solution available 24 hours a day, 7 days a week, 365 days a year, was implemented. From a clearing and settlement perspective, The 'Straksclearing' solution is based on the concept of pre-funding, wherein banks provide liquidity to the Danish National Bank ahead of time. Due to this, express transfers have a maximum limit of 500,000 Danish Kroners (roughly equivalent to 67,000 Euros as of time of publishing) for both individuals and companies. For standard credit transfers, the cut-off times vary per bank and payments initiated before the cut-off will be credited on the recipient account the next business day. Similarly, for same-day credit transfers between two DKK accounts, the cut-off times vary per bank; however, as the name indicates, payments initiated before the cut-off will be credited on the same day.

Instant payments, make up two-thirds of person-to-person (P2P) transactions in Denmark. In fact, the number of instant payments has more than quadrupled since 2016, far surpassing instant payment adoption in other markets – four years after launch, Denmark reached approximately 60 instant payments per capita, while Sweden and the UK just had 10 per capita. 

Use cases of Danish A2A transactions include B2B & B2C payments, salary payments, and peer-to-peer transfers. 

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FIK payments

Also called OCR payments, FIK payments are direct transfers from local banks in Danish Kroner (DKK). The FIK code is usually included at the bottom of the invoice by the vendor, and it's represented by a unique OCR string utilized to identify the vendor and the invoice/purchase document in connection to the payment.

The FIK code is the only information required when making these kinds of payments.

An example of a FIK code is +71<000000000000000+00000000<, where 71+ represents the payment type, followed by vendor identification number and invoice number.

FIK payments need to be submitted by 6:30 pm to be credited on the beneficiary bank account on the following business day.

FIK payments are the most commonly used to pay non-recurring invoices.

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NemKonto payments

A NemKonto (Easy Account) is a regular bank account that an individual or a business in Denmark designates as their primary account for receiving payments from Danish public institutions. Instead of public institutions needing to know and maintain specific bank account information for each individual or business, they use identifiers like the civil registration number (CPR), business registration number (CVR), VAT number, SE-number, or P-number to process payments. The purpose of NemKonto is to streamline and simplify transactions between the public sector and citizens or businesses in Denmark.

To obtain a NemKonto, individuals and companies must obtain a NemID. Once you have the NemID, you can assign your chosen bank account as your NemKonto. Payments can be completed using the CPR, CVR, VAT number, SE-number or P-number.

Nemkonto payments are usually executed as standard credit transfers but certain banks, such as Nordea, support same-day credit transfers for NemKonto payments. The cut-off times vary per bank.

Every individual resident in Denmark and every Danish company must have a NemKonto (Easy Account).

The Danish public sector utilizes NemKonto payments to make tax or VAT refunds, send child subsidies, pensions, unemployment benefits, social welfare payments, etc.

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MobilePay

MobilePay is a mobile payment application widely used in Denmark, launched in 2013 by Danske Bank.

To use it, people must be at least 13 years old, be residents of Denmark, have a Danish phone number and bank account, and have a CPR number. To transfer money to someone else with MobilePay, you just need their mobile phone number. Payments are processed in real time.

It is the most popular digital wallet in Denmark, with a penetration of more than 92% among Danes. Since the merger in 2022 of MobilePay and Vipps, a popular Norwegian mobile wallet, the new combined entity now counts 11 million users and over 400,000 online and offline stores as customers. 

Most commonly, MobilePay is used to send and receive money among individuals. Other use cases include sharing expenses for gifts, group expenses, subscriptions, invoices and paying online or in-store. In addition to its popularity among individuals, MobilePay is also used by many Danish businesses, enabling them to accept one-off and subscription payments and invoice customers. 
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Direct Debits

Betalingsservice

Betalingsservice is the Danish direct debit scheme focused on consumers (B2C). However, it can also be used for business payments (B2B). Direct debits are used to collect recurring payments, such as invoices, gym memberships, utilities, subscriptions, and instalments. Betalingsservice has a wide penetration in the country, with more than 95% of Danes using it. 

To access Betalingsservice, a PBS (Payment Business Service) number is required. This can be obtained through Mastercard Payment Services.

Prior to collecting direct debits, a mandate (betalingsaftale in Danish) must be signed with the customer. Each mandate must include the following: 

• The Civil Personal Registration (CPR) of the payer for individuals and the CVR if payments are to be collected from a business; 
• The bank account number and bank registration of the payer; 
• The PBS number and the debtor group number of the payee (the payment beneficiary); 
• A unique mandate reference – it will be utilized to schedule future payments. 

Upon collecting the mandate details, it can be activated with Mastercard. 

To ensure timely processing, submissions must be made to Mastercard from Monday to Friday, by 9:00 am (CET), six working days before the end of the month before the month in which the collection is due. Mastercard will notify the customer of all payments that will be debited from their account in the upcoming month.

Customers can cancel their mandate at any time by contacting the bank. After three days from the cancellation request, no further payments can be collected from the customer’s account. The mandate will automatically expire if no collections have been made for 15 months.

Customers can request a refund no later than on the 7th day of the month when the collection was debited from their account. If the 7th happens to be a weekend or a public holiday, the customer will be given an extra business day to request a refund. The merchant cannot make any refund requests that have been initiated within this timeframe. Requesting a refund will not cancel the mandate. 

If a rejection or reversal is initiated after the payment has been made, the funds will be automatically debited from the merchant's account and returned to the customer. However, if the collection has not yet been made, it will be canceled, and no funds will move between accounts.

After the 7-day window, customers can file a claim for up to 13 months after the payment date. If the account was debited without a mandate in place or the debited amount does not correspond with the mandate, then the customer’s bank will claim the funds from the creditor bank. The creditor has the right to dispute claims made against them. 

According to Mastercard Payment Services, the debtor bank can return a payment for any of the following reasons:

• Debtor’s account does not hold sufficient funds on the payment date (insufficient funds)
• The Betalingsservice mandate used has been cancelled by the debtor or debtor’s bank
• Debtor’s bank does not accept the Betalingsservice mandate
• The Betalingsservice mandate has expired because the debtor no longer holds an account with the bank prior to the payment date.
• Payment data or processing is erroneous. 

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Leverandørservice

Similarly to Betalingsservice, Leverandørservice enables the automatic collection of recurring payments in DKK between bank accounts held with banks that are authorized to access the scheme. Leverandørservice is only used for Business-to-business (B2B) direct debit collections. 

It’s used to collect any type of one-off or recurring payments. 

Leverandørservice is designed for B2B transactions, but is less prevalent than Betalingsservice.

To enter into a Leverandørservice creditor agreement, the creditor must have an active Danish CVR number or tax registration number.

Prior to collecting any direct debits, the customer must give authorization in the form of a mandate. Each mandate must include the following:

• The CVR number of the debtor;
• The bank account number and bank registration of the payer; 
• The PBS number and the debtor group number of the payee (the payment beneficiary); 
• A unique mandate reference – it will be utilized to schedule future payments. 

To ensure timely processing, submissions must be made from Monday to Friday, by 3:30 pm (CET), one working day before the end of the month prior to the month in which the collection is due.

The debtor can refuse a payment by sending a request in writing for the non-execution of the payment to the debtor’s bank. This applies only to the specific payment without disabling the mandate. 

A refund can be requested for a payment already executed with a written request to Mastercard’s payment services no later than the third banking day following the collection date. The creditor cannot contest this refund request. Also, in this case, the refund request applies only to the payment specified by the debtor and not to other future payments covered by the mandate.

According to Mastercard Payment Services, the debtor bank can return a payment for any of the following reasons:

• Debtor’s account does not hold sufficient funds on the payment date (insufficient funds)
• The Leverandørservice mandate used has been cancelled by the debtor or debtor’s bank
• Debtor’s bank does not accept the  Leverandørservice mandate
• The Leverandørservice mandate has expired because the debtor no longer holds an account with the bank prior to the payment date.
• Payment data or processing is erroneous.

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Denmark, P27 and the future of Nordic payments

If what is described in this brief guide is how payments work right now in Denmark, it's also noteworthy to underline that things will evolve significantly with P27. 

So, what is P27? It is a joint partnership between six of the largest banks operating in the Nordic region: Nordea, OP Financial Group, SEB, Handelsbanken, Swedbank and Danske Bank. 

P27 will transform the Nordic payments infrastructure and align it with the SEPA, enabling businesses and consumers to make real-time multi-currency payments across the region.

P27 will be a common clearing platform for DKK, SEK and EUR, drastically changing how cross-border payments work for Nordic companies and individuals. Moreover, the P27 platform will also work for domestic transactions and support instant and batch-based payments. 

If you want to learn more about P27, we recently published a blog post with all the critical information you need.  

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How Atlar can help

With Atlar, you can access local Danish payment rails through an API and dashboard via your existing banks.

To save companies from manually managing payments and wasting engineering resources on building direct integrations with banks, we have built the Treasury Operating System that allows you to support Danish payment schemes – both for credit transfers and direct debits – out of the box. As mentioned before, the Danish payments landscape is rapidly changing with the introduction of P27 and Atlar's platform makes it easy for companies to transition to the new infrastructure.

Our Treasury Operating System offers an end-to-end solution for managing payment flows, enabling businesses to initiate credit transfers and direct debits, automate reconciliation, monitor transactions and balances in real time, and track the status of payments via webhooks to combat returns and refunds.

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Get in touch 

If you’re a company looking to automate payments over Danish payment rails, we’d love to speak with you! Book a demo here.

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