Introduction

Iceland was one of the countries that led the way when it came to moving away from cash. Even twenty years ago or more, the proportion of cash circulating was very low and Icelanders were already very tech savvy. The pandemic focused minds on the transfer of germs using cash; tapping a card was contactless and thus perceived to be safer. With the rise of smartphones, many of us have banking apps on our devices and can keep track of the money in our account on the go.

Credit and debit cards stored in mobile payment systems such as Google Wallet. Transfi Wallet, Apple Pay and Samsung Pay make it even easier to pay for goods and services. Simply tap with your phone and you’re all done. Secure and convenient, these digital wallets enable users to pay by card without their card details being revealed, which is why so many travellers also now like to use this as their preferred form of payment.

Icelandic Payment Methods – What Is The Most Popular?

Payment methods and preferences differ greatly from country to country. Here are the most popular Icelandic payment methods. 

1. Cards

Many Icelanders live largely cash-free. Debit and credit cards are accepted just about everywhere, and for many locals, they are the preferred payment method in Iceland. Cash is only 2.3% of Iceland’s GDP, and most of the country operates cash-free (European Payments Council).

Visa and Mastercard are widely accepted in Iceland. Iceland takes its national financial security very seriously after being hit hard by the 2008 financial crisis. (Bloomberg). These days, swipe-and-sign cards are out. Icelanders pay with chip-and-pin cards that are generally more secure – or they pay using a digital wallet.

2. Digital Wallets

Digital wallets are gaining traction as one of the most popular online payment methods in Iceland, especially since Icelanders are so keen to do their banking and buying from their smartphones. Today, many international and Nordic fintechs are popping up to offer more locally-based solutions for payers. Transfi has risen to power as fintechs grow in Iceland providing preferred payment methods, security, cross border and local solutions tapping into the routines of the tech savvy Icelandic population. 

3. Bank Transfers

For bank transfers, Iceland uses Single Euro Payments Area (SEPA). This works when the payer authorizes a creditor to obtain funds from the payer’s bank account. This lets customers pay for purchases through bank transfers, direct debit payments and card payments while denominated in Euros. SEPA covers all of the European Union as well as countries like Iceland, Switzerland, UK and others. SEPA helps make cross-border payments as simple as domestic payments (European Commission).

Iceland: A Rebounding Economy Poised for eCommerce Growth

As Iceland recovers from a major tourism blow during the global pandemic, the country’s ecommerce landscape is expected to ramp back up. This is thanks to a growing preference for online shopping, plus a familiarity with and desire for foreign imported goods. Because of that, payments for cross-border purchases have tracked upwards. The same goes for B2B payments in Iceland and from Iceland, internationally.

For you to succeed in the Icelandic market, you must accept consumers’ preferred payment methods while providing an easy checkout experience. The digital landscape is changing quickly, and companies must tailor their approach to the Nordic environment — especially in a culture where trust is integral. Merchants must support all of Iceland’s local payment methods in order to attract shoppers and keep buyers coming back.

This is where Transfi comes into picture;

TransFi is amongst the best Iceland Payment Solutions providers, as it is not only secure and globally compliant but also quick, cost effective and easy to integrate. By using TransFi’s payment gateway businesses can easily facilitate cross-border payments in Iceland and support all major local payment methods in Iceland. The platform also supports digital financial inclusion in Iceland by allowing businesses to tap into global markets seamlessly, securely and with no complex paperwork.

Also read about: What are the advantages of a payment vault?

How to choose the right payments platform in Iceland? 

While choosing a payment platform in Iceland, one needs to make strategic choices depending on your business and operational needs to blend into the local market. From providing smooth financial transactions to abiding by security laws, each small and big decision will directly affect your business in the market and derive customer satisfaction. Below are the considerations you must follow through when choosing a payment platform for your business. 

1. Providence of multiple currency options 

The chosen payment gateway must be able to assess Icelandic Krona for local transactions and currency exchange ease for some sort of facilitation for international transactions. This dual capability would allow your business to expand and reach customers all across the world. This can be a very good way into cross border transactions. 

2. Integration with local and widely used payment systems

The integration of the gateways with local banks and payment methods and systems dictates its reliability and stand point in the market locally. Direct collaborations with financial institutions speed up the transactions in the widely accepted secure manner.

3. Abiding by regulatory compliances

The ability of the payment platform to operate within the regulations and standards of Chinese financial systems makes it a legal and strong contender in the market. It also makes it trustworthy across the globe if local and global compliances are drawn fully for the gateway. 

4. Fee structures of different providers

The payment gateway would provide a full circle satisfaction if it comes with cost effectiveness along with all the other features. A gateway that offers straightforward fee schedules and subscription models for convenience helps in planning, budgeting and taking strong financial decisions for your business when you are to manage financial costs as well as operational costs together. 

5. Customer support advantage

When it comes to digital technologies and growing customer demands, it comes with a high requirement of constant customer support for using these features smoothly and making the most out of the services in the right ways. One must look for gateways which provide prompt assistance and the means to resolve payment issues easily. 

6. Integration possibilities 

A gateway that offers hassle free setup and easy plugin into your own setup of websites, platforms or existing business systems is the right choice of a payment gateway. It should require minimal technical indulgence by the business to set up the gateway and quickly have it running for the business smoothly. 

Look at no other solution when it comes to running your business smoothly on the side of finances -  managing transactions, secure flow of money, customer support, it’s all covered with the cost effective solutions of Transfi. 

The right payment solution for Icelanders

Selecting the right payment solution that consolidates billing, payments and subscription, security, and more is key to the success for your business. Transfi provides the following advantages over other solutions and gives valuable benefits to its users: 

1. Billing features: Transfi provides tools to support various billing methods, offers multiple payment options, provides robust fraud protection and includes robust subscription management.

2. Costs: Transfi comes with no transaction fees, minimal setup costs, and additional charges from various processors to fit the best fit for your budget.

3. Security and compliance: Transfi as a payment processor implements strong security and fraud prevention measures, complies with industry standards to protect customer data and collects taxes from customers correctly.

4. Customizability: The ability to customize functionalities and integrate with third-party software can help create a more seamless experience using Transfi.

5. Scalability: Transfi ensures to accommodate growing transaction volumes and expansion into new markets.

6. Localisation: for cross border payments, Transfi supports multiple languages and currencies.

7. Reliability: Transfi provides robust customer support and transparency in each and every step ensuring reliable means and legal compliances. 

Transfi is a cross-border infrastructure business focussed on enabling global companies to make payments in, out, and across the world. Transfi is one of the first ones to bring Virtual Accounts, combined with a global foreign exchange network, to countries across the globe providing flexibility of payment methods, currencies and stablecoins. 

Conclusion

By understanding what each payment method provides, you can identify the pros and cons of using each payment method whether it is for personal or business use. Based on the purpose of using, you can take advantage of the ones that fit your business and spendings best, as it will not only help you save time and efficiency but also help you avoid unnecessary hidden fees and charges. In this day and age of digitization in Iceland, Transfi brings the perfect blend of what one would need in their digital payment activities. 

If you’re still unsure about which payment solution to use in Iceland, the answer is definitely Transfi. You can use it anywhere in digital form with ease and promptness. 

Iceland is very digitally advanced, and strong government support is making it even more cashless. People prefer using cards and e-wallets, while cash is only used in some situations. However, the best solution for spending in Iceland is having a little bit of cash on you in case you end up needing it. 

Frequently asked questions (FAQs)

1. What is the role of the Central Bank of Iceland?

The Central Bank of Iceland grants operating licenses to payment service providers and monitors that their operations are in accordance with applicable laws and regulations.

2. What's the safest way to accept payments in Iceland?

The safest way to accept payments in Iceland is through Transfi. We comply with the highest level of PCI DSS security standards through tech like tokenization, which hides transaction details in transit. 

3. How should I accept payments over the Internet in Iceland?

A platform such as TransFi with secure payment gateways, multi-currency functions, and real-time settlements suits local and global businesses.

4. What are the most popular payment methods in Iceland?

The most popular payment methods in Iceland are credit cards and digital wallets.

5. How can my business accept digital payments from Iceland?

Your business can easily accept payments from Iceland with Transfi. We offer global payment processing for a wide range of payment methods popular in Iceland. When you work with Transfi, you can let your customers pay you the way they want, while knowing that your payment system is completely secure.