UPDATE 1-Nordea joins rival DNB's Vipps payment app in Norway

* Apps simplify cash transfers and payments

* Nordea Norway switches to DNB’s Vipps from Danske Mobilepay

* Danske to stop offering Mobilepay in Norway (Adds quotes, background, detail, COPENHAGEN dateline)

OSLO/COPENHAGEN, Oct 11 (Reuters) - Top Nordic bank Nordea will start offering rival DNB’s mobile payment app to customers in Norway, leading Danske Bank to shut its service in the country, the companies said on Wednesday.

Nordea’s Norwegian unit had cooperated with Danske’s Mobilepay, but many customers opted instead to install DNB’s more widely used Vipps app on their smartphones.

Both Vipps and Mobilepay are preparing for Europe’s revised Payment Services Directive (PSD2) to come into effect in 2018, which could eventually expose Nordic banks to competition from the likes of Facebook, Apple and Google.

In February, Vipps announced a takeover of smaller Norwegian rival mCash, leaving DNB with a 52 percent stake while a group of more than 100 smaller banks would own the remaining 48 percent. Nordea will not take a stake in Vipps.

Copenhagen-based Danske Bank said it would no longer offer the Mobilepay service to Norwegian customers, and that it would instead seek a distribution deal with DNB.

The Vipps app currently has 2.6 million users and said it aims to hit 3.5 million in 2018. Norway has a population of about 5.3 million.

“Everything has pointed to a consolidation of the market for mobile payments. We’re happy to see banks that operate in Norway rally around a joint solution,” Vipps head Rune Garborg said in a statement.

“This will further strengthen us in the international competition over mobile payments,” he added. (Reporting by Camilla Knudsen in Oslo and Jacob Gronholt-Pedersen, writing by Terje Solsvik; Editing by Keith Weir)