Europe strives to create a single digital market. Strengthened security norms and the decentralization of financial services are among the most important goals for the next few years. Yet today, each state has its own payment traditions and 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. The readers of this article will discover which payment options enjoy the highest demand in twelve European countries and what are the differences between them.

The Power of Cash

These statistics were taken from a study conducted by the European Central Bank. 73% of European financial transactions involve cash. Cards account for 24% of operations. 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.

The ease of access to cash is declining. In 2016, 94% of respondents found it satisfactory. Now, this indicator equals just 89%.

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

When planning an international money transfer, you will hardly use cash because it takes too much effort and the commissions are high. Thanks to the growing popularity of e-commerce, people tend to order goods from abroad more frequently. For this, 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 owners of these cards can rely on SEPA Direct Debit. As for SEPA itself, it is not as widespread as debit cards (Maestro) and credit ones (Visa/Mastercard and Amex).

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

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

The Irish find credit cards the most convenient payment option. Visa is their firm favorite. A typical consumer has 1-2 cards. However, the demand for web wallets is rising too, with PayPal being the trailblazer.

In Italy, mobile payments are the most popular solution. When paying for their purchases from their mobile devices, the residents of this country often use web wallets. More and more individuals try prepaid cards due to their minimal costs and outstanding security. The most frequently used prepaid debit card is Postepay, co-branded with Visa. The traditional Visa and Mastercard are widespread as well.

The Dutch opt for direct debits and open invoice payments. Also, they love their national iDEAL inter-bank system that is covered by all major consumer banks in the Netherlands. It enables 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 accounts for up to 75% of the e-payment segment. Many residents often use cash on delivery too.

In Portugal, approximately 85% of total sales involve MultiBanco payments. This is a post-pay method that implies generating a reference at the checkout. Then, the customer transfers funds via online banking or an ATM, using a debit card. Portugal is the only country where Visa and Mastercard failed to make it into the top three most popular payment methods.

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

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

In Spain, the number of ATMs per 1,000,000 residents 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 popularity but still have a long way to go to become a widespread solution.

In the UK, a typical resident has 2-3 debit cards. Mobile shopping and web wallets are also widely adopted, while online banking hardly exists at all.

Final Thoughts

The most common payment solutions in Europe differ greatly depending on the state. For casual 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 hard to predict which digital payments solution could become the pan-European leader in the foreseeable future.