Finland

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Payments

Bank transfer is a popular method in Finland. This service sees the consumer making a ‘push’ payment from their bank account to that of the merchant. Again, this provides consumers with additional confidence as they feel more in control of the transaction. As there are a large banks in Finland, it is worth using a partner that can aggregate these services as part of the checkout process.[1]

Domestic and Preferred Card Schemes

Finland prefers online banking. [2]

Alternative Payment Methods

Debit and credit cards are not the preferred method of payment. [3]

Other Payment Methods

Online bank transfers dominate eCommerce purchases, accounting for nearly half of all transactions (48.1%).

Invoice payments are also popular, accounting for 17.7% of transactions but mobile accounts for just 1%. According to the World Bank, mobile phone subscriptions have grown and are now at 173 per 100 people, suggesting mobile is an area for focus. [4]

Digital Invoicing

According to the ACCA paper, Finland and Denmark were clear leaders in e-invoicing adoption, topping Eurostat rankings in terms of adoption by large enterprises (Finland 89% and Denmark 76%), medium-sized companies (Finland 78% and Denmark 58%) and small businesses (Finland 59% and Denmark 52%).[5]

Customer Experience

Reinforcing concerns around simple payment methods, the following graphic highlights payment method availability as the biggest concern by respondents to a DIBS survey.[6]

Payments Regulation

In line with Nordic regional trends, Finland has made significant progress towards becoming a cashless society, as several companies and government offices in Finland have abandoned the use of cash. The National Land Survey of Finland stopped accepting cash in two customer service branches in North Karelia during January–April 2013; the primary reason for this was to save costs, as cash deposits needed to be sent to the bank once or twice daily. As the trial was successful, the National Land Survey of Finland stopped accepting cash in all branches in Central and Southern Finland, and Pirkanmaa-Satakunta. Similarly, Aurinkomatkat, one of Finland's largest travel agencies, has terminated cash payments in its service offices.[7]

Local entities

To capitalize on the fast-growing mobile payments (m-payments) market, an increasing number of retailers are allowing customers to make payments by mobile phone. OP-Pohjola Group launched a mobile wallet app, Pivo, in March 2015. The wallet uses Host Card Emulation (HCE) technology to emulate a card on an NFC-enabled device to make contactless payments. This service is available for holders of Visa Debit and Visa Electron cards. Since May 2014, the Finnish hamburger chain Hesburger has allowed customers to make payments and redeem reward points by using the Seqr mobile app, which was developed by the Swedish company Seamless.[8]

Mobile payments

Contactless technology is gaining acceptance among Finnish consumers, and issuers are introducing cards enabled with contactless technology to gain a market share in the cards and payments industry. At the end of 2015, there were three million contactless cards in Finland, and this is expected to more than double by the end of 2020. The latest initiatives in contactless payments include the collective introduction of MasterCard-branded contactless cards by Euroloan Consumer Finance and Compass Card in August 2015, and the MasterCard Bankkontokort debit card with contactless functionality by Ålandsbanken in 2014. In addition, the Finnish telecommunications company Elisa and convenience store chain R-Kioski began selling pre-loaded near-field communication (NFC) payment stickers in April 2014, featuring MasterCard's PayPass technology.[9]

Logistics

Although made up of four separate and distinct countries , there are sufficient similarities to treat Denmark, Finland, Norway and Sweden as a collective e-retail market from a logistics perspective. The Nordics present some interesting logistics issues for retailers wishing to reach all of its consumers with a total population of approximately 26 million spread over an area of 120,000 sq km, including hundreds of islands. However most of the population is concentrated in the south and in coastal areas.

Copenhagen Airport is the largest airport for passenger, cargo and express companies in the Nordics. The airport also acts as a major cargo hub for global logistics providers such as DHL, Fedex, Kuehne & Nagel and PostNord.[10]

Infrastructure

Global carriers

There are a number of global carriers able to provide collection, distribution and delivery into the Nordics (using their own operations or local partners). The main ones are:

UPS - Offers a range of services and delivery times to the Nordics subject to country of origin and the specific destination

• UPS Express Plus – 1 to 2 business days delivery by 09:00

• UPS Express – 1 to 2 business days delivery by 12:00 noon

The example service times above are from the UK.

• UPS Express Saver – 1 to 2 business days delivery by end of day

• UPS Standard – 3 to 5 business days delivery during the day

Fed Ex – Offers two main services to the Nordics with delivery times subject to country of origin and the specific destination:

• International Priority – 1 to 3 business days

• International Economy – 2 to 5 days

DHL – Offers one main service option, namely – Export Express Worldwide – guaranteed delivery by the end of the next possible working day. As an example, from the UK to the Nordics this will typically be the next working day subject to the exact delivery address.

TNT – Offers a range of international services to the Nordics starting from next day by 09:00 subject to country of origin and the specific destination. As an example, from the UK:

• 09:00 Express – Denmark

• 10:00 Express – Denmark and Sweden

• 12:00 Express – Norway and Sweden

• Express – Next day – all countries

• TNT does not offer its lower cost day-defined Economy Express service from the UK to the Nordics

DPD – DPD is particularly of note in the Nordic market because PostNord (the postal service provider for Sweden and Denmark) is a strategic partner and its delivery partner in all four countries. It offers a range of service options to the Nordics with the examples below showing transit times from the UK in business days:

In respect of e-retail deliveries perhaps the two most interesting services are:

• DPD Classic which includes DPD Predict, a pre- delivery advice notification which is a service feature generally welcomed by online shoppers

• DPD Direct which is DPD’s own branded direct access solution (see section – Direct access) offering lower cost consignment + kilo rate pricing, customs clearance, tracking and a returns service for unwanted items.[11]

Deliveries

For its ‘home’ markets of Norway and Finland, Bring provides its home service which offers a fixed price per parcel.

• Before a delivery attempt is made, the recipient is contacted by phone in order to agree the day on which they want their parcel delivered

• Deliveries are scheduled Monday-Friday between 09:00 and 21:00

• If the recipient cannot be reached by phone they will be sent a letter with information regarding their parcel and asked to get in touch to arrange a day and time for delivery.

Posti Group (Finland Post) provide both home delivery and pick-up options for the Finnish ecommerce market. Home delivery services are offered at a price premium in Finland:

• Express Flex – a tracked service for delivery to the customer’s selected address after one or two working days but always by appointment. The customer’s address AND phone number must be shown on the label. If after two call attempts the customer cannot be reached, a call-back request is left and the parcel retained for the week of delivery plus two further weeks before being returned to the sender if not delivered or collected

• Small Item – for parcels up to 2 kilos and 250 x 353 x 30 mm. These will usually be delivered within two weekdays of dispatch, with the normal letter mail. A non-signature service, the item will be left in the mailbox but if it is too large, the customer will have to collect it.

The lower cost option is usually for the customer to collect their parcel:

• Economy – for delivery to the recipient’s selected postal outlet by 16:00 the next working day with collection until 17:00 that day or for two weeks afterwards. The customer is sent an SMS message (or letter if no mobile phone number is provided) advising that the order is available for collection from a dedicated area in their chosen outlet

SmartPost uses Posti Parcel Points – lockers where customers can choose to have their parcels delivered. Some shoppers may already have registered free for the My Pick Up Point option to have all of their parcels delivered to a particular locker location. Currently only available in Helsinki and Utsjoki although the network is being extended.[12]

Import Duties

The delivery operator selected will be able to provide full details and advice on the necessary documentation and processes and some can go further by pre-clearing orders while the goods are in-transit or at the start of their journey using a consumer duty paid process. This can be done using the HTS code assigned to each product category and can reduce delivery times and remove a potential barrier of having the goods held when they arrive in country. Retailers are therefore advised to specifically ask what their chosen delivery partner can do to facilitate customs clearance and duty calculation / collection.[13]

Marketing

Online purchases from abroad seem to be less popular this period (Q2 2015), as the percentage of Nordic residents who shopped online at foreign sites decreased slightly. This decrease was most noticeably in Norway, although it is still the country with the largest number of people who shop online from abroad in this region. Consumers in all the Nordic countries like to shop online from the United Kingdom. [14]

Finnish Commerce Federation is a nationwide lobbying organisation whose mission is to promote Finnish commerce. We work to improve the operating conditions for companies active in wholesale and retail trade, to stimulate co-operation within the sector and to enhance the commercial and employer interests of our members. [15]

Email is still the consumer’s daily first digital point of contact, followed by news and Facebook.[16]

Translation

As the online environment allows selling worldwide without building traditional brick-and-mortar stores to every country, expanding the ecommerce business abroad is becoming increasingly tempting. Finland among other Scandinavian countries is an interesting market area: according to statistics Finland has comparatively high purchasing power and it can also be seen as a gateway to Russia. We interviewed a Swedish ecommerce service provider and a web store to hear out their thoughts about selling to Finland online. However, there are always some obstacles in the way, as Karlsson points out:

“Entering a new market is a rather big challenge regardless of which one you choose to start with. Even though Finland and Sweden in many ways are quite similar there are differences that need to be taken into account for a successful launch in Finland. The overall biggest challenge regardless of market is usually the cost for translation of content to new languages. For instance with the Finnish language you need to take into account that it is a ‘long’ language that may even affect the design of the web shop. [17]

Shoppers

The most frequent online shoppers are 30-44 years old.[18]

Social Media

Nearly a quarter of merchants are seeing positive ROI from their social media spend, with Facebook by far the most popular. YouTube has a place however as do Twitter and Snapchat.[19]

Major shopping categories

Fashion is the most popular online retail sector in Finland, followed by media and home electronics. Travel is by-far the most popular vertical for purchases via a mobile device while apparel and electronics are showing signs of expansion. The key brands to watch, especially in the international space, are Amazon, CDon, eBay, HM.com and Zalando. CDon and Komple are particularly interesting brands worth investigating further.[20]

Major retail holidays

Shops and deparment stores in Finland are allowed to be open every day of the week, excluding the public holidays mentioned below.

New Year’s Day (Jan 1), Epiphany (Jan 6), Good Friday, Easter Day, 1st of May, Mothers’ Day (2nd Sun in May), Ascension Day, Whitsuntide, Midsummer Day, All Saints’ Day, Fathers’ Day (2nd Sun in Nov), Independence Day (Dec 6) and Christmas Day (Dec 25).

On Midsummer Eve and Christmas Eve shops are allowed to be open between 7am and 12 noon.[21]

Legal / Regulatory

The provisions of the Privacy and Data Protection Act apply to the processing of personal data, unless otherwise provided elsewhere in the law. Namely, the Act Applies to the automatic processing of personal data. Also other processing of personal data where the data constitutes or is intended to constitute a personal data le or a part thereof. Also, the processing of personal data where the controller is established in the territory of Finland, or otherwise subject to Finnish law.

Where the Controller is not established in the territory of a Member State of EU, the act applies where the controller uses equipment located in Finland in the processing of personal data, except where the equipment is used solely for the transfer of data through the territory. In this case the controller shall designate a representative established in Finland. Does Not Apply; To the processing of personal data by a private individual for purely personal purposes or for comparable ordinary and private purposes and to personal data les containing, solely and in unaltered form, data that have been published by the media.

The Finnish Consumer Protection Act Regulates on Various Fields:

Chapter 2. Regulation on Marketing: No conduct that is inappropriate or otherwise unfair from the point of view of consumers shall be allowed in marketing. Marketing that does not convey information necessary in respect of the health or economic security of consumers shall always be deemed unfair. Marketing must clearly show its commercial purpose and on whose behalf marketing is implemented. The Seller is prohibited in delivering the goods to the customer, if the goods are not expressly ordered. Comparison of the goods to the competitors products is acceptable as long as the information on the competing products are not false or misleading.

Chapter 3. Regulation on Contract Terms: In general the Contracts are binding. However, the concept of ‘Social Civil Law” has been accepted into the Finnish Contract Law. The consumer is kept as a weaker party of a contract where the contract has been made between a consumer and a trader. The EU Directive on unfair terms in consumer contracts (93/13/EEC) has been implemented by the Consumer Protection Act.

Chapter 5. General Provisions on the Sale of Consumer Goods: The section 5 applies where the seller is a business, and the buyer is a consumer. A contract provision, which di ers from what has been laid down in the Consumer Protection Act to the detriment of a Customer shall be void. For example where a warranty has been granted to a product, the restriction of a warranty right is not possible, and the Consumer has always the right to invoke the failure in the product, and rely on the warranty that was granted at the time the purchase took its place.

Chapter 6. Door-to-door selling and Distance Selling (E-Commerce): The Chapter 6 regulates on the 14 days money back guarantee. Opposite to the other types of business, the consumer bears the right of returning the product without further explanation in 14 days time. The Consumer is the one bearing the costs caused by the returning of the goods. After receiving the noti cation of the withdrawal, the Seller is to return the paid money without delay.[22]

FX Policies

Finnish foreign exchange controls have been abolished.[23]

Technology

Another interesting finding is that 40% of the Finnish consumers think it’s important an online store doesn’t require consumers to login, in other Nordic countries these percentages are way lower (21%, 23% and 24%). [24]

Security

A 2014 survey by Bring highlighted security as the most important consideration for consumers shopping online.[25]

Mobile appetite

Mobile appetite In total, just 1% of online spend in Finland is made via mobile device. 20% intend to use a smartphone or tablet to purchase goods in the next 12 months, even though only 12% do so via smartphones, and just 3% via tablets today. 49% say that they don’t see mobile commerce as appealing, with website optimisiation - or lack of it - and difficulty with the payment process being the main barriers. [26]

The global rank also serves to highlight how advanced Finnish consumers are in the adoption of smartphones yet, although the usage of mobile devices is growing, it is also important to note that desktops are still an important component in the digital journey. In Finland, desktops are often the first point of contact when researching activities associated with a consumer’s ‘digital’ life. Apple smartphones hold a slim majority over Android devices.[27]

References

  1. eCommerce Worldwide. The Nordics Cross Border Passport. "
  2. ECommerce News "An Analysis of the ECommerce Market in the Nordic Region"
  3. ECommerce News "An Analysis of the ECommerce Market in the Nordic Region"
  4. Worldpay. "Alternative Payments 2nd Edition Report"
  5. Nordic Business Report "Finland and Denmark Lead Race to Achieve EU e-Invoicing Goals"
  6. eCommerce Worldwide. The Nordics Cross Border Passport. "
  7. PR Newswire "The Cards and Payments Industry in Finland"
  8. PR Newswire "The Cards and Payments Industry in Finland"
  9. PR Newswire "The Cards and Payments Industry in Finland"
  10. eCommerce Worldwide. The Nordics Cross Border Passport. "
  11. eCommerce Worldwide. The Nordics Cross Border Passport. "
  12. eCommerce Worldwide. The Nordics Cross Border Passport. "
  13. eCommerce Worldwide. The Nordics Cross Border Passport. "
  14. ECommerce News "ECommerce in the Nordics"
  15. Kauppa "Finnish Commerce."
  16. eCommerce Worldwide. The Nordics Cross Border Passport. "
  17. Maksuturva. "How to Expand Your ECommerce Business to Finland"
  18. eCommerce Worldwide. The Nordics Cross Border Passport. "
  19. eCommerce Worldwide. The Nordics Cross Border Passport. "
  20. eCommerce Worldwide. The Nordics Cross Border Passport. "
  21. Helsinki "Shopping"
  22. eCommerce Worldwide. The Nordics Cross Border Passport. "
  23. export.gov "Finland Foreign Exchange Controls"
  24. ECommerce News "An Analysis of the ECommerce Market in the Nordic Region"
  25. eCommerce Worldwide. The Nordics Cross Border Passport. "
  26. Worldpay. [www.Worldpay.com/global_shopper "Global Shopper."]
  27. eCommerce Worldwide. The Nordics Cross Border Passport. "