Finland - Country Commercial Guide
Trade Financing

It covers payment methods and information on, banking systems, foreign exchange controls, and U.S. and correspondent banking.

Last published date: 2021-09-14

Methods of Payment

Finland has a modern banking sector. Most of the banks have devised services drawing on new technologies, where customers constantly welcome new ways of innovative banking solutions. Finnish banking is different from banking elsewhere in Europe. For example, in Finland, 96 percent of all adults primarily make payments electronically in 2018. Payment transmission between businesses is almost entirely electronic.

Finland is experiencing accelerated growth in non-cash transactions. In 2016, Finland’s residents made an average of 460 non-cash transactions per capita. Payments by card, direct debit, and credit transfer are booming as people turn to mobile banking, contactless cards, and other innovations rather than cash.

Finland is part of the Single Euro Payments Area (SEPA), created by European banks, the European Central Bank, and the European Commission. SEPA was created to harmonize euro payments in 36 countries. SEPA means that there will no longer be any distinction between national and cross-border Euro payments.

Finland is one of the forerunners in terms of easy and secure card payment. Payment cards issued by banks are mostly debit cards linked to accounts. All cards issued by banks are international SEPA-compliant cards – most commonly MasterCards or Visa cards – and have an embedded chip to improve security. A company willing to accept card payments must first make a contract with either a bank or another acquiring service provider. Instructions for accepting card payments are given by service providers.

Mobile payments have increased in popularity in the past few years. Person-to-Person (P2P) has been a steppingstone for mobile payments in Finland and in the Nordics. In Finland the market is quite fragmented and there are several applications offering their services: MobilePay (20 percent), PayPal (15 percent), Pivo (9 percent), Siirto (6 percent), ApplePay (3 percent), GooglePay (2 percent). Among other Nordic countries, Finland still has the lowest percentage of mobile pay users/ week, 34 percent whereas people who have never used mobile payments the share is 48 percent (2019).

An increasing number of Finnish vendors require “Strong Identification” when conducting online and mobile transactions to meet requirements under the EU-wide General Data Protection Regulation. Establishing such “Strong Identification” can require making special arrangements when using non-Finnish financial institutions, and for foreign nationals without a Finnish National ID Card using Finnish financial institutions. Many foreign nationals including Americans have experienced difficulty interacting with vendors using Strong Identification protocols.

Banking Systems

The Finnish banking system is dominated by three major groups of deposit banks together employing about 20,500 people in banking: OP Group, Nordea Bank Finland, and Danske Bank Plc Group. Operating since 1982, Citibank International plc. was the first foreign branch in Finland.

The entire financial world is going through massive change with the arrival of financial technology, fintech. Banks are adapting to changes by cutting on personnel, closing offices, corporate restructuring, and renewing business models. The sector’s operations were influenced by low and even negative market rates, stricter regulation, expanding digitalization, and slow growth in the national economy. In Finland the number of institutions has decreased. In May 2020, there were 237 credit institutions operating in Finland. These included domestic deposit banks, investment banks, and branches and subsidiaries of foreign deposit banks and credit institutions. The banks had a total of 790 offices in Finland at the end of 2019, which is 64 fewer than the year before. Mergers have shaped the modern Finnish banking sector. Banks and insurance companies have sought new forms of cooperation, and the operations of banks have extended to many sectors of financing and investment.

The most important piece of legislation governing banking in Finland is the Act on Credit Institutions. Compliance with the laws and regulations is overseen by the Financial Supervisory Authority, which also monitors that banks maintain a healthy ratio of capital adequacy. The overall capital adequacy ratio of the Finnish banking sector was one of the strongest in Europe. The Financial Supervisory Authority (FIN-FSA), also known as Finanssivalvonta (FIVA) is the authority for supervision of Finland’s financial and insurance sectors. The entities supervised by the FIN-FSA include banks, insurance, and pension companies as well as other companies operating in the insurance sector, investment firms, fund management companies, and the Helsinki Stock Exchange.

Many expats and non-Finnish businesses and organizations have reported that a combination of complex regulatory requirements and poor customer service uncharacteristic of other walks of life in Finland have resulted in difficulties accessing and interacting with Finland’s banking system.

Finance Finland is a trade body that represents its member companies who engage in the financial services industry in Finland. Its core mission is to influence the regulation and decision-making that affects the financial sector.

Foreign Exchange Controls

Finnish foreign exchange controls have been abolished. Except for those relating to money laundering, there are practically no legal obstacles to direct foreign investment in Finnish securities and exchange control regarding payments into and out of Finland. There are no restrictions on currency transfers or repatriation of profits. Residents and non-residents may hold foreign exchange accounts. There is no limit on dividend distributions, if they correspond to a company’s official earnings records. Payments to or from Finland must, however, be made through authorized banks in Finland.

Finland has implemented the Cash Control Regulation (CCR), the EU regulation on controls of cash being transported over the EU Border since 2007. According to this regulation, persons carrying EUR 10,000 or more will be required to declare cash upon entering or leaving EU territory. This regulation was revised in 2018 (applicable from 3 June 2021) and it extends the definition of cash to cover not only banknotes, coins and bearer negotiable instruments but also commodities used as highly liquid stores of value such as gold. Cash sent by post, freight or courier shipment is also included in the scope of the Regulation. The regulation only imposes an obligation to declare and does not restrict or prohibit import or export of cash.

U.S. Banks and Local Correspondent Banks

All principal Finnish banks have extensive correspondent relationships with U.S. banks, maintaining relationships with banks in every state, as well as with all the larger financial center banks. Citibank International plc is the only U.S. bank with a branch in Finland.

Further information on correspondent relationships can be obtained from Finance Finland (FII).

Interested parties may contact: FFI@financefinland.fi