SIGCIS 2012 Workshop, Parallel Session III: Three ICT Innovations that transformed the Danish Society – The Nordic Way

Name: Henning Jensen
Institutional Affiliation: Member of the HiNC4 Program Committee, Danish-IT Senior Club. Former project manager, now retired
E-mail address:
Paper Type: Traditional
Paper Title: Dankort – a National Debit Card System Established in Denmark in the Early 1980s.
Paper Abstract: In the mid 1970s the Danish banks faced at problem in controlling the payment procedures in Denmark. The use of cheques had increased dramatically, and the costs for handling a paper cheque was also increasing.  Facing this the Danish banks decided to establish a common national electronic debit card system (Dankort).  The system was the first of its kind in the world.

Some fundamentals for the system in 1980.
All Danish employees must have a bank account, because of the Danish tax system PAYE (Pay As You Earn). The employers must deliver salary- and tax information electronically to the banks.

The financial market was split between many commercial banks and many savings banks. Business customers were mainly  in the commercial banks, private customers mainly in the savings banks. Saving banks were by law restricted in their business opportunities.

There were a limited number of computer centers within the financial industry. All medium scale and smaller banks/sawingbanks were members of common dp-centers, and there were only about 15 centers to cover the whole Danish financial industry.

A “Danish electronic cheque” had to be developed. The idea was launched in mid 1970s.

The technical system.
Which terminals should be used?
None on the market could fulfill the demands for transmission and security. (Encryption)
So completely new terminal equipment had to be developed.

The network.
Every shop – even the smallest outlet - should have a terminal linked to a computer center. How could it be done in 1980? Every shop was expected to have a telephone. Therefore data communication had to be via the telephone network. But the max. speed at that time was 300 baud, and many switchboards were still analog.

The central computer?
The demand was: handling 200 transactions per second (A very high demand at that time.)
Only the biggest airline ticket reservation computer could fulfill that demand. The price for such one was not acceptable. Thus a new computer type (hardware and software) had to be constructed.

But the biggest challenge was political.
The banks wanted to have the users and the shops to pay for the system.
They would not repeat the failure from the cheque system, which was very expensive.
The shops would not pay anything and started a “say no to the Dankort” campaign.
The users would not pay anything. “Why should I pay money to the banks for paying with plastic cards in shops?” Using cash is free. In fact, legislation was necessary (privacy protection, split of costs, etc.)

Slow introduction
The whole idea behind the new debit card system was that it should be a 100 % it solution.
But in fact the first introduction (Sept. 1st, 1983) was a paper based system. The fully electronic system was introduced 1½ year later. The delay was mainly for political reasons.