October 3, 2023


Be life confident

The evolution of the European payments market: From cash to digital

2 min read

A new study by Payments Europe shows the extent to which new trends have emerged post-pandemic regarding the payment’s behaviour of consumers and merchants in Europe.

According to the report, The evolution of the European payments market: From cash to digital, what do Europeans want? Europeans have increasingly moved to using digital methods of payments, with 8 in 10 in-store transactions being electronic in 2021.

Interestingly, over 2 in 3 users (67% of consumers, 70% of merchants) want this trend to evolve even further and noted that they welcome government initiatives to encourage the use and acceptance of electronic payments.

“Since 2019, cash payments have been declining in Europe. The Covid-19 pandemic clearly accelerated the trend towards the use of electronic payments, and more specifically towards the use of contactless card payments,” explains Hendrik Frank, Board member of Payments Europe.

“Our study found that contactless payments were the most widely used payment method in stores over the past 12 months with 25% of all transactions. A majority of European consumers would feel comfortable raising contactless limits to up to €150 per transaction.”

European merchant payment acceptance preference

With consumers using more and more electronic payment methods, merchants have seen that card payments are now accounting for more than half of their monthly turnover.

The research investigated this trend and found that cards best respond to consumers’ needs when making payments: the online and mobile functionality, the security of funds, as well as the convenience cards bring.

From a merchant perspective, the study found that 4 in 5 merchants also highly value the security cards bring, and more than 90% of European merchants believe that the benefits brought by card payments outweigh any costs associated with it.

The European payments market is becoming increasingly diverse as there are more payment options available than ever.

The research found that both consumers (88%) and merchants (76%) are happy with the available solutions. Although physical cards remain the preferred payment method for both consumers and merchants, mobile cards, mobile instant and BNPL (Buy-Now-Pay-Later) are significantly on the rise.

“While cards are still the most used and liked product in Europe for in-store payments, the survey also reveals interesting trends regarding more recently introduced ways of paying: it is expected that Buy-Now-Pay-Later (BNPL) options will triple over the next 12 months and that the use of instant payments will double over the next year,” says Michael Hoffman Board member of Payments Europe.

European consumers feel that instant payments are widely available, particularly for online purchases and person-to-person payments. Almost half of consumers believe it is available for in-store payments.

However, the study shows that 89% of consumers in Europe believe there are risks linked to using instant payments. And this is also the case for merchants: while 9 out of 10 merchants said they are satisfied with the current features of instant transfers, 8 out of 10 also believe this payment option comes with a higher risk of failed transactions at the point of sale.


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