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Digital payments are replacing the Western European strong cash preferences: new yStats.com report.

Digital payments are replacing the Western European strong cash preferences: new yStats.com report.

Western European consumers see an alternative to traditional payment methods in mobile payments

In Europe, debit card payments were the most common payment method for online purchases in 2020, closely followed by digital wallets, such as PayPal. In some countries of Western Europe, including Germany and Italy, the latter even was the first choice of online shoppers. Furthermore, despite the strong cash culture in Western Europe for in-store payments, mobile payment adoption increased in the region, especially after the onset of the COVID-19 pandemic. The number of proximity mobile payment users in this part of Europe was predicted to increase steadily by CAGR 6% over the three years from 2020 to 2023. At the same time, the preference for cash payments dropped compared to 2020. Moreover, contactless payments gained momentum during COVID-19. For example, in the UK, in 2020, every nine in ten purchases made with a card was contactless. In Germany, online consumers also adopted contactless payments quite rapidly, and two-fifths of them expressed annoyance in 2020 when a contactless alternative was not available.  Furthermore, in the Netherlands, the share of contactless payments is also growing year by year, and in 2020, it constituted more than half of the total transaction value.

BNPL steadily wins the market share in Western Europe

During the COVID-19 pandemic, also the Buy Now Pay Later gained in popularity in Western Europe. As of 2020, on average, one-fifth of merchants in select European countries offered the BNPL option, with “growth mindset” businesses even more likely to do so. Moreover, on a country level, almost half of German consumers who were aware of the existence of this payment method in 2020, had already used it, and around one-third were planning to use it in the next 12 months, according to surveys referenced in the yStats.com report.

Local online payment providers dominated the market in some Western European countries

Regarding the online payment service providers, these varied on the country level in Western Europe. However, there were some definite country-specific leaders. As such, in Belgium, Bancontact online services accounted for half of all B2C E-Commerce payments in 2020 and Swedish Swish was preferred by one-fifth of the Internet users in the country for online payments, according to recent research cited by yStats.com.