Euro transfers cost less than Nordic-currency payments
Swedes often pay less and transfer money faster in euros than in Nordic currencies, according to a Riksbank report with Nordic central banks. The advantage also applies between countries outside the euro area.
Integration stops at the payment
Payments between Nordic countries remain expensive despite the region's high degree of integration, according to the Riksbank and its Nordic central bank partners.
Their report examines the costs households face when making cross-border payments.
Transfers in euros are often cheaper and quicker than transfers in Nordic currencies, including between two countries outside the euro area.
The authors attribute the lower costs mainly to European Union regulations governing cross-border euro payments, which do not apply to transfers in Nordic currencies between Nordic countries.
Consumers' costs for card payments abroad also vary considerably across the region.
Competition meets cross-currency infrastructure
Niche banks, or neobanks, generally offer cheaper Nordic-currency payments within the region than traditional banks.
The report identifies greater competition as a potential means of reducing costs over time.
Banks can also use the TIPS cross-currency infrastructure launched by the European Central Bank (ECB), Danmarks Nationalbank and the Riksbank.
The infrastructure is available to banks and, according to the report, could improve Nordic cross-border payments and lower costs.
Currency choice still matters
Regional integration has not eliminated differences in household payment costs.
The report links the euro's cost advantage mainly to regulation rather than geographic proximity.
Competition and available infrastructure offer routes to lower costs, not evidence of reductions already achieved.