Vipps vs. mCash: What happens when the incumbent is the startup?

We don't really reblog as a rule, but I enjoyed the following analysis from Kjetil Holmefjord on the Norwegian p2p mobile payment landscape so much, I've made an exception.

This originally appeared on Kjetil's own blog, and has been edited by Neil S W Murray for The Nordic Web.

By Kjetil Holmefjord.


We’re sitting at the office today discussing how Vipps appear to have taken the dominant position in the Norwegian p2p mobile payment market over night. Launched just over a month ago, they have caught up with and surpassed mCash (I’m hearing that Vipps already has more than 200k downloads), who have pushed a very similar product to Norwegian users for more than a year already. The incumbent vs newcomer story, but here the incumbent is actually the startup. So, how do the two products compare - and could mCash have done something differently?

A quick overview of the features shows that the two products differ somewhat. The request-money feature is something I personally consider very beneficial in a P2P-payment service (as the person lending money has the biggest incentive to settle). Merchant pay extends mCash’s areas of usage, and of course free trumps fee. Evidently, mCash is the far superior product feature-wise (unless you consider not being on WP a deal-breaker, but you probably don’t).

Product UX

Both products have the same simple sign-up flow, and allow users to pay to others knowing nothing but the recipient’s phone number. The two products have very similar UX, but (without claiming to have done any extensive analysis) I would dare say that Vipps has a slight edge. Look for instance at the login-screen, where the user has to do an unnecessary swipe to login at mCash. Still, it’s details that separate the two in this category.


mCash has raised an impressive 6,6 MUSD from venture capitalists, but that’s still nothing compared to DnB’s war chest. Wherever you look in Oslo these days you will see ads promoting Vipps, and this is obviously the main reason why they are seeing such insane growth these days. 

But that is just part of the story. mCash has had the opportunity to market their product in peace and quiet for over a year, and with (and you can buy quite a bit of attention for 6,6 MUSD as well). mCash has not succeeded in doing this, and in my view this is because they have failed to communicate their unique selling point (USP) clearly. 

I’ve been using the “Danish Vipps/mCash” called Mobile Pay for a couple of years. It has crazy penetration in the Danish market, and is used by “everyone in Denmark” for p2p mobile payments. When I moved from Denmark to Norway last summer, I was excited to find that there was a service called mCash doing something similar. Gradually, I realized that very few were aware of mCash, and those who were most often commented something like “isn’t that the thing you use to pay at Burger King?”.

Looking back at articles covering mCash when they launched, I see that what was presented was a mobile merchant and p2p payment solution (emphasis mine), examples here and here. In my view, the USP (and conveniently also the growth mechanism) of Vipps/mCash is the P2P payments. And if your users instead think that you provide an easier way to buy burgers, you’re probably doing something wrong.

What’s making Vipps take off these days is clearly not that it’s an alternative to using a VISA-card at Burger King. It’s not possible to do so, but more importantly: it’s not communicated. The best, most advanced product isn’t always the victor, and in this case it’s more important to communicate the right USP to your potential users. And Vipps are solely focusing on their USP: removing friction in p2p payments

There are of course alternative hypotheses as well, such as that people are hesitant to use a payment solution from an unknown startup, and that mCash entered the market too early. As Mobile Pay was succeeding in DK a year ago, I dismiss the latter. It’s a bit harder to completely dismiss the benefits of being pushed by Norway’s largest bank - but I don’t believe that it is the sole determining factor in this game.

And of course, it’s always easier to comment after-the-fact. While I haven’t met many of the people behind mCash in person, knowing how hard the startup life is I have tremendous respect for the work they have done. While I don’t think they will, I really hope they’re able to turn this around.