Local e-wallets in Europe – how are they holding up to the competition?

Growth of mobile wallet payments in Europe

More consumers in Europe are shopping with their smartphones. Data shows that more than half of all online sales in Europe were on mobile. While across the world, 75% of consumers report using their mobile phones to shop online. This has led to a huge surge in mobile payments through digital wallets. In fact, they are amongst the top 3 most-used payment methods in Europe right now. More than 44% of Europeans say they prefer to pay with their digital wallets apps.

Digital wallets, also called mobile wallets or e-wallets, are mobile apps that encrypt and store users’ payment info like credit/ debit card and bank account details. Major global e-wallets like PayPal, Apple Pay, and Google Wallet have a strong footprint in Europe. But there have been a slew of home-grown European challengers that have risen up fast to take on these global players.

What makes digital wallets a great choice for merchants?

Digital wallets are simple and easy to setup, cost very less to operate, and promise secure payments. Shoppers also find them convenient as they allow for on the go, one-click payments. Without the need to whisk out their cards or fumble with things while paying. This makes the entire shopping and paying experience more seamless and much simpler. The use of biometric features like fingerprint scan or Face ID make payments doubly secure. Digital wallets are also PSD2 compliant, making them a viable option for merchants in Europe.

Also read: Why Digital Wallets are Important for Your Business

Main players in Europe – how have they been faring

PayPal is the number one digital wallet in Europe – by far. Around 90% of users report using PayPal to make online payments in 2022. It is the leading e-wallet in major e-commerce markets, including Germany, France, UK, and Italy. Apple Pay, Amazon Pay, and Google Wallet are other players present in these markets.

But despite the dominance of these US-based e-wallets from Big Tech, Europe has been pushing hard with its own set of innovators. One example of this is Mobile Pay, a digital wallet operated by Denmark-based Danske Bank, which recently reached an agreement to merge with two other leading Nordic mobile wallets — Norway’s Vipps and Pivo in Finland. This will help Mobile Pay to serve over 11 million users and over 330,000 merchants across Europe, and make it Europe’s strongest bank-backed digital wallet.

On the other hand, Italy’s Bancomat Pay and Satispay both offer mobile apps that allow users to connect their bank accounts and phone numbers. They can be used to make peer-to-peer payments directly from one bank account to another. For merchants looking to accept electronic payments, they provide a cheaper alternative to cards. Bancomat Pay is the mobile and online payment solution of Italy’s interbank network Bancomat, which operates a domestic card scheme and many of the country’s ATMs. Satispay runs independently of any bank, debit, or credit card network. It is accepted by merchants in Italy, Germany, Luxembourg, and France, and has plans to expand across Europe. In another move, Poland’s Blik recently acquired the Slovakian mobile transaction specialist VIAMO.

What can customers and businesses in Europe expect in future?

More options. Higher interoperability between payments systems within the EU will lead to easier, faster, more secure payments, competitive prices, and fair market competition. This means smoother cross-border trade and a frictionless payment experience for users across the continent. To achieve this, the European Mobile Payment Systems Association (EMPSA) – an alliance consisting of 16 digital wallet providers – is helping key European players to collaborate and bring in higher integration between different systems.

In August 2022, EMPSA successfully tested interoperability between BANCOMAT Pay, TWINT, and Bluecode payment services in Switzerland, Germany, and Austria. Users of Bancomat Pay will soon be able to make payments at merchants who accept TWINT (mobile payment system in Switzerland) and Bluecode (found in Germany and Austria). Once this project is fully rolled out, the merchant networks of each mobile payment system will become integrated. This will allow users of any of the participant wallets to make payments across Italy, Switzerland, Germany, and Austria, as if they were using the same wallet. And as the infrastructure opens up, users of digital wallets will be able to link their IDs, loyalty programs and reward schemes, thus enabling real-time data flows between systems. This means a pan-EU acceptance network that will remove much friction and simplify payments across the entire region.

How can Novalnet help for business in using mobile wallets?

We can help you set up digital wallets so that you can easily and quickly start accepting payments. Based on your business goals, we can help you choose the e-wallets that are best suited for your business, guide you with the right strategy and tools to get you going. Novalnet is a global PSP, trusted by Europe’s leading brands to handle their payments. Our state-of-the-art technologies and methods help you accept payments globally. From our instant payment plug-ins to our AI-based risk management tools, we have the resources to get your payments up and running in no time, and with zero hassle.
Reach out to us today to know more.

Jose Augustine

Jose Augustine is the Chief Business Development Officer at Novalnet with extensive experience in European payment industry and a knowledge powerhouse.