The payments industry in Europe has undergone substantial transformations, primarily fueled by the expansion of ecommerce and the increased utilization of smartphones, as well as amplified regulatory endeavors and geopolitical influences. These alterations have resulted in the emergence of new market participants and reinforced regulatory supervision, reshaping the payments industry.

This whitepaper sheds light on the EU’s dynamic and diverse payments landscape, providing a comprehensive overview of the payment industry’s trends and evolution.

Emerging trends

Digital payments have gained widespread adoption in the European payments industry, driven by their user-friendly and convenient nature. To adapt to this shift, investments in payment infrastructure, including the development of new networks and faster systems, have further enhanced the efficiency and seamlessness of the payment environment for businesses and consumers. Additionally, the payments industry in Europe operates under strict regulatory oversight, which has fostered a more secure and transparent payments ecosystem, benefiting both consumers and businesses.

The emergence of fintech companies has significantly influenced the European payments industry by challenging traditional banks and payment providers. These innovative players provide payment solutions that are more convenient and cost-effective, fostering increased competition and driving industry-wide innovation that ultimately benefits consumers and businesses.

Geographical disparities

The European payment landscape exhibits a high degree of diversity, with innovation primarily taking place at the country and regional levels, despite the EU's mandate for a standardized regulatory framework. The adoption of PSD2, intended to foster payment innovation, varies significantly across Europe. The UK emerges as a dominant player in the Open Banking market, accounting for approximately 40% of all registered TPPs in Europe. In contrast, Europe faces challenges, due to fragmented technical standards for example.

Various disruptive events, such as the 2008 financial crisis, Brexit, the COVID-19 pandemic, and the conflict in Ukraine, have hindered regulatory harmonization in Europe. While PSD2 introduced innovative payment services, concerns have also emerged regarding the protection of personal data. Strong Customer Authentication (SCA), a pivotal aspect of PSD2, significantly influences customer journeys and serves as a key differentiator in the payments landscape. The European Commission initiated consultations on Open Finance and data sharing frameworks for the financial industry, along with a public consultation to assess the application and impact of PSD2 on the payments sector. These initiatives reflect a clear intention to promote regulatory harmonization and level the playing field.

Structure of the report

In part 1, Deloitte presents the main developments of the payment industry over the past year at European level, including Luxembourg, and provides valuable market insights. As Open Banking reshapes the boundaries of payment services, various drivers of change and new trends are driving significant developments across the industry.
 

In part 2, The Payments Association EU takes a closer look at the players and features of the European payments landscape on three different levels.

First, it examines the payments industry from a global perspective, mapping the non-European actors that run their businesses in the EU. Then, the focus is shifted to European players that, while headquartered in Europe, also operate in non-European countries. Finally, part 2 features a regional perspective, highlighting the various players and comprehensively analyzing the EU’s various countries. Here, The Payments Association EU summarizes each Member State’s domestic payment representatives and unveils several country-specific findings.

It is important to note that most European payment players can fit into multiple categories. For example, payment service providers that enjoy a strong presence in their home country, but also with operations in neighboring countries, are included in both the report’s domestic and regional sections.

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