Payment methods

What payment methods are most popular in the largest European countries

European authorities are planning to create a single digital market on the continent – but today the most popular payment methods differ greatly from country to country. From this article, you will learn which options residents of twelve European countries use to pay for their purchases.

Europe is striving to create a single digital market. The strengthening of security standards and the decentralization of financial services are among the most important objectives for the coming years. Yet today, each state has its own traditions and payment preferences. Cash and credit cards are popular in most parts of the continent. But it is impossible to predict which digital payment system could become the pan-European leader in the foreseeable future. Readers of this article will find out which payment options are most in demand in twelve European countries and what the differences are between them.

The power of cash

These statistics were taken from a study carried out by the European Central Bank. 73% of European financial transactions involve cash. Cards represent 24% of transactions. People tend to use cash for small purchases and cards for large ones. In terms of transaction value, 41% belongs to cards and 48% to cash.

Ease of access to cash is declining. In 2016, 94% of those questioned found it satisfactory. Now this indicator is equal to only 89%.

In Malta, 88% of financial transactions are in cash. In Cyprus and Spain, people use cash for 83% of transactions. In Portugal, 81% of payments are made in cash. In other countries, this ratio is lower.

When planning a international money transfer, you will use little cash as it takes too much effort and the commissions are high. With the growing popularity of e-commerce, people tend to order goods from overseas more frequently. For that, they need web wallets, bank cards and other solutions.

The most common payment options in Europe by country

In Belgium, the leader is the national Bancontact system. It has issued more cards than there are residents in the country. Bancontact debit cards are used for POS, mobile and online payments. To carry out repetitive transactions, the holders of these cards can rely on the SEPA direct debit. As for SEPA itself, it is not as widespread as debit (Maestro) and credit (Visa / Mastercard and Amex) cards.

The French remain faithful to their national bank cards, Cartes Bancaires. Normally, they are co-branded with Visa or Mastercard.

The German market is fragmented. For online purchases, residents of this country normally use SEPA, SOFORT and Giropay direct debit. In retail, they prefer open invoices (which means that a third party pays for the goods and collects the payment from the consumer after delivery).

The Irish find credit cards to be the most convenient payment option. Visa is their favorite. A typical consumer has 1-2 cards. However, the demand for web wallets is also increasing, with PayPal being the pioneer.

In Italy, mobile payments are the most popular solution. When paying for their purchases from their mobile devices, residents of this country often use web wallets. More and more people are trying prepaid cards because of their low costs and exceptional security. The most frequently used prepaid debit card is Postepay, co-branded with Visa. Traditional Visa and Mastercard cards are also widely used.

The Dutch opt for direct debits and open bill payments. Also, they love their national iDEAL interbank system which is covered by all major consumer banks in the Netherlands. It allows customers to use their bank accounts for internet purchases. By the way, the Netherlands is the only European country where neither Visa nor PayPal are among the most common payment methods.

The most popular online banking system in Poland is called Pay-by-links. It represents up to 75% of the electronic payments segment. Many residents also use cash on delivery.

In Portugal, around 85% of total sales involve MultiBanco payments. This is a post-payment method that involves generating a checkout referral. Then the customer transfers funds through online banking or an ATM, using a debit card. Portugal is the only country where Visa and Mastercard failed to rank among the three most popular payment methods.

Romania has the largest cash on delivery share in Central and Eastern Europe. Among the cards, Visa is the most widely used. In the online banking payments segment, more than 40% of the market share belongs to three local entities: Banca Transilvania, BRD and Banca Comerciala Romana.

Credit cards are not very popular among Russians. Residents of this country often process payments through ATMs and use cash on delivery. Over 40 million consumers use online banking and debit cards from Sberbank, the largest national bank. Two local projects dominate the web wallet industry in Russia: Qiwi and Yoo.Money. The first has more than 150,000 offline payment terminals. The latter was previously known as Yandex.Money, but was later acquired by Sberbank and underwent a rebranding.

In Spain, the number of ATMs per 1,000,000 inhabitants is among the highest on the continent. Over 85% of consumers have at least one credit or debit card. All cards are co-branded with Visa or Mastercard. Prepaid virtual cards are slowly gaining in popularity but still have a long way to go to become a popular solution.

In the UK, a typical resident has 2-3 debit cards. Mobile shopping and web wallets are also widely adopted, while online banking is virtually non-existent.

Final thoughts

The most common payment solutions in Europe differ greatly from state to state. For occasional purchases, people still use cash, but when they want to buy something online, they rely on mobile payments, web wallets, or cards. So far, it is difficult to predict which digital payment solution could become the pan-European leader in the foreseeable future.


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