Financial Cards and Payments in Western Europe

February 2021

Great changes were seen in financial cards and payments during 2020. Coronavirus (COVID-19) has significantly accelerated the move away from cash, as consumers and retailers tried to avoid handling it, providing strong impetus for contactless payments, widely seen as the most hygienic means of paying for goods. 2020 has also seen further strong growth in e-commerce, with consumers locked down for extended periods in their homes or trying to avoid public places during the pandemic.

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Key Findings

COVID-19 accelerates the move away from cash

The COVID-19 pandemic had a major impact in 2020, with consumer payments seeing their first significant decline since 2009, when the after-effects of the 2008 financial crisis were still being felt. As all parties looked to avoid cash and embrace card or, where possible, contactless payments, m-commerce continued to boom, while cards and, in particular, electronic direct/ACH transactions performed better than paper payment transactions.

Debit favoured over credit for contactless card payments

Debit transaction value declined at a much slower rate than credit in Western Europe in 2020. In the rise of contactless payments, debit cards are generally preferred for replacing small-value cash purchases. In addition, in 2020, due to the economic impact of the measures to contain the pandemic, consumers were also a little more reluctant than usual to rack up more credit on their cards and were also generally eschewing big-ticket items for more essential goods.

Payments via smartphone continue to rise

The dynamic growth of m-commerce continues unabated in Western Europe, driven by the rise of contactless mobile payments and the increasing use of the smartphone as a shopping device. While some countries, such as Sweden or the UK are particularly advanced in this area, adoption even in cash-dominant countries is accelerating, with further impetus provided by the pandemic.

The Revised European Payment Services Directive (PSD2) could drive market changes

Europe’s payment landscape has seen significant changes to its regulatory framework with the introduction of the Revised European Payment Services Directive, which came into full effect in September 2019. The consequent introduction of open banking and the emergence of instant payments, is driving the development of innovative and potentially disruptive payment solutions.


Key findings

Regional Overview

Western Europe continues to lose ground to other regions
Card payments decline, but clearly outperform the use of cash
Return to positive growth expected immediately in 2021
No let-up in the move from cash to card payments
Attraction of contactless payments rises during the pandemic
Cash losing out to electronic and card payments
Debit cards continue to dominate, store cards still in decline
Debit and pre-paid cards perform best during the pandemic
Mobile payments continue to thrive during the pandemic

Leading Companies and Brands

National operators dominate in many local markets
Visa and Mastercard putting pressure on local operators
Greater convenience offers issuers and operators a path to growth

Forecast Projections

Positive but slowing annual growth rates expected from 2021
Pandemic serves to speed up the move away from cash
Card payments will continue gaining share
Instant payments pose a threat to sustained card payment growth
Dynamic growth rates will gradually start to slow
M-commerce maintains its dynamism during the pandemic

Country Snapshots

Austria: Market Context
Austria: Competitive and Retail Landscape
Austria: Consumer Payment Transactions and M-commerce
Denmark: Market Context
Denmark: Competitive and Retail Landscape
Denmark: Consumer Payment Transactions and M-commerce
France: Market Context
France: Competitive and Retail Landscape
France: Consumer Payment Transactions and M-commerce
Germany: Market Context
Germany: Competitive and Retail Landscape
Germany: Consumer Payment Transactions and M-commerce
Greece: Market Context
Greece: Competitive and Retail Landscape
Greece: Consumer Payment Transactions and M-commerce
Italy: Market Context
Italy: Competitive and Retail Landscape
Italy: Consumer Payment Transactions and M-commerce
Netherlands: Market Context
Netherlands: Competitive and Retail Landscape
Netherlands: Consumer Payment Transactions and M-commerce
Norway: Market Context
Norway: Competitive and Retail Landscape
Norway: Consumer Payment Transactions and M-commerce
Portugal: Market Context
Portugal: Competitive and Retail Landscape
Portugal: Consumer Payment Transactions and M-commerce
Spain: Market Context
Spain: Competitive and Retail Landscape
Spain: Consumer Payment Transactions and M-commerce
Sweden: Market Context
Sweden: Competitive and Retail Landscape
Sweden: Consumer Payment Transactions and M-commerce
Turkey: Market Context
Turkey: Competitive and Retail Landscape
Turkey: Consumer Payment Transactions and M-commerce
UK: Market Context
UK: Competitive and Retail Landscape
UK: Consumer Payment Transactions and M-commerce


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