Evolution of Retail Payments in Finland in the 1990s

During the 1990s the availability of location-specific retail payment services in Finland declined substantially, but at the same time there was a surge of development of self-service methods. These new methods, which make use eg of mobile phones and the Internet, dramatically increased the availability of payment services that are not tied to location.More traditional forms of payment still exist; for example, the use of cash remains significant.In Europe there are marked differences between countries with respect to the use of different payment methods. Generally, the use of cashless payment instruments has increased during the last ten years, but it seems that payment patterns are still not converging to similar structures. The development of the Finnish retail payment system has long roots, and several factors - eg the salary bank arrangement of the 1960s and the severe banking crisis of the early 1990s - have influenced the development of the current Finnish payment system. In the retail payments area, new technologies are developing rapidly.The success of new forms of payment (based eg on mobile phones) in gaining general acceptance may depend on changes in the nature of consumption.If customer demand increasingly shifts toward virtual goods and services, the demand for new types of payment methods such as electronic money may increase substantially. Keywords: retail payments, electronification, ATMs, Internet banking