The EU said no – Vipps must submit a new integration application

financial technology

The merger of the three northern provinces Vipps, Mobilepay and Pivo fell on Finland. Rune Garborg expects a faster response to the new application.

The European Commission was so clear in its remarks that we had to choose between finding solutions or risk delaying progress in integration for too long. Then we decided to find a solution. On Friday afternoon, Rune Garborg could push the button and send a new merger request to the European Commission.

At the Vipps building in Bjørvika in Oslo, there has been hard work since the three portfolio companies received word from Brussels in mid-July that the Commission had concerns about Finland.

– This came as a surprise to us, Vipps CEO Rune Garborg in an email to Shifter.

In Norway and Denmark, Vipps and Mobile Pay have been the dominant players for a long time. In Finland, on the other hand, Mobilepay has nearly 2 million users and Pivo 1.2 million. Consequently, the Committee believed that the merger would create market concentration in the portfolio market that was too high.

I got clear feedback

Thus, the new application just submitted without Finnish participation.

– The European Commission was so clear in its remarks that we had to choose between finding solutions or risk delaying progress in integration for a long time. Then we chose to find a solution, he writes.

This decision also means that the Finnish bank OP, which owns Pivo, is also leaving the merger cooperation.

We would of course like Pivo and OP to continue to participate, Garborg writes.

frustrated waiting

Now the integration continues with Vipps and Mobilepay only. Given that the Danish wallet is also the largest in Finland, and that there are many Finns who use both apps, the loss of market share should not be decisive.

Vipps will continue to merge with Mobilepay in Denmark and Finland, and there is no change in the two parties’ ambitions to create one common mobile wallet, Garborg wrote.

When Shifter spoke to Ron Garburg this summer, nearly a year after he sent the first request, he was clearly frustrated with the wait.

For Garborg, every day without warning was a waste of time in the international competition to get into the huge pie of online payment.

Now Garborg writes in an email

– We notice every day that this market is characterized by global players who are more and more positioning themselves in Europe, so it is clear that time is important to us. This merger is never too late, but we’ve never been closer to our goal than we are now.

Expect a new answer within a month

– Do you have to start the process over?

– Fortunately not. The sending of the formal request is the result of a long dialogue and we hope it will mark the final stage of a longer and quality dialogue with the European Commission.

– How long do you think it might take?

We expect a response from the committee in about a month.

Already this summer, Rune Garborg was able to say that Vipps has worked hard to prepare for a flying start when positive merger notice arrives.

We’ve put in place a very ambitious plan to migrate all wallets to one platform in just over a year, says Garborg.

This plan remains firm.

Since plans for the merger became known last summer, Vipps has worked with the idea that the combined company would have 11 million users, 400,000 stores, and 900 million annual transactions in a single mobile wallet.

Despite the fact that Pivo and about a million users have disappeared from the equation, the numbers are almost the same. Vipps has 4.3 million users in Norway, while Mobilepay has 4.2 million users in Denmark and 2 million users in Finland.

New ownership part

With Pivo and OP Bank out of the game, the ownership portion has been recalculated. Norwegian banks that own Vipps now take 72.2 percent, up from 65 percent, while Danske Bank’s share has risen from 25 percent to 27.8.

There will be no changes at the senior management level, and Ron Garburg will also become Managing Director at the new company. Mobilepay’s Klaus Bunkenburg will become deputy managing director and Kjerstin Braathen, the current president of Vipps and managing director of DNB, will become president of the new company.

Other members of the management team and the Board of Directors will be announced when the transaction is completed.