What you need to know about the European payments landscape in 2024
2024 is set to be a big year in the European payments space, from e-walletsto the European Payments Initiative
The financial technology landscape in 2024 promises to be dynamic and transformative, with several trends set to shape the future of payments in Europe.
From the inexorable shift towards a cashless society in which cards and digital wallets are king, to the rise of social commerce and the adoption of e-wallets through initiatives like the European Payments Initiative (EPI), businesses are gearing up for an innovative year in payments.
The momentum being built towards a cashless society is unstoppable, with many European countries already making significant strides. In the UK, cash payments have plummeted from 54 per cent in 2012 to a mere 14 per cent in 2022, and this trend is poised to continue.
Despite this shift, it's essential to acknowledge that cash remains a vital payment method for specific demographics, particularly in Eastern Europe.
Concerns persist that a cashless society could leave certain communities lacking technological access and in the lurch.
To address this, Europe must adopt an inclusive approach, expanding payment options rather than eliminating cash.
The focus should be on consumer-centric strategies, offering a diverse array of payment methods that are not only more convenient and secure than cash but also cater to various preferences. This way, Europe can navigate towards a cashless society without leaving anyone behind.
Social commerce surge
As Gen Z in Europe matures and hits the job market, the generation is finding itself with far more disposable income. As you’d expect of this digital generation, they want to shop in a familiar and convenient way.
The answer: they want to shop through apps like TikTok and Instagram. This social commerce has seen huge growth of late and has an expected 34 per cent annual growth rate in Western Europe as we look towards 2025.
Businesses targeting Gen Z in 2024 need to think differently and adapt. Gen Z will be persuaded to make purchases from reviews and influencer endorsements, meaning merchants with solid social media marketing strategies and in-app social media payments capabilities, will excel in the coming year.
All in all, 2024 is set to be a year of innovation and change for the European payments landscape. For this reason, it’s crucial that merchants and retailers can harness the opportunities presented through these up-and-coming technologies and predictions.
Europe is keen to shake off its reliance on financial technology from global superpowers, such as the US, and through initiatives such as the EPI, we’ll see it make moves to become another tech superpower.
Digital wallets on the rise
E-wallets, already popular in China and Southeast Asia, are making waves in Europe. I predict we’ll see the region catch up with China, where already 84 per cent of consumers use e-wallets.
Already, adoption in Europe is growing and transaction values for e-wallets have surged by over 30 per cent in the last three years. The move by the EPI to launch an EU-wide digital wallet, starting in France, Germany and Belgium next year, will increase the pace even further.
Against the backdrop of this rapid growth, it’s important to remember that the European e-wallet landscape faces unique challenges due to the diversity of payment preferences and technological disparities across member states.
To take just two examples – in France card payments are prevalent but in Greece, cash remains king – this means there can be no one-size-fits-all approach. What seems likely to me is that the popularity of e-wallets is only set to grow in the coming years across the continent.
Fintech strategies for a dynamic European payments landscape in 2024
Businesses need to seize the opportunities presented by emerging technologies and evolving consumer preferences in 2024 if they’re to thrive.
With initiatives like the EPI, Europe aims to position itself as a leader in the payments space and challenge the dominance of the incumbent global fintech players.
The convergence of trends, from the push towards a cashless society to the embrace of social commerce and the adoption of e-wallets, sets the stage for a transformative year in the world of European payments.