The European mobile payment sector is undergoing a period of notable evolution, characterised by its fragmentation and significant expansion.
As outlined in a new mobile payments report by Arkwright Consulting, through BLIK, EPI, and MobilePay/Vipps, the industry offers a broad spectrum of payment methods, from international wallets to local solutions.
This diversity reflects the varied consumer preferences and market dynamics throughout Europe.
Key Insights from the report:
Sector Fragmentation: The European mobile payment landscape is notably fragmented hosting international mobile wallets, pan-European initiatives like EPI and EMPSA, alongside more than 45 local mobile payment options (not including niche closed-loop systems and merchant-specific apps equipped with payment functionalities).
Best Practice Recognition: Eight local systems are identified as leading examples of relative European best practices based on their market reach, user base, and volume of transactions. These systems are Bizum, Blik, MB Way, MobilePay, Payconiq, Satispay, Swish, Twint, and Vipps.
Growth Trajectory of the relative Best Practices: Between 2017 and 2022, these relative best practices have shown a compound annual growth rate (CAGR) of 52%, culminating in over 5 billion transactions in 2022.
This growth rate is nearly sixfold that of card payments in Europe for the same timeframe, indicating a significant shift in consumer and merchant adoption in specific European markets.
Despite expectations of a decelerating growth rate, these solutions are anticipated to continue shaping European payment habits.
Determinants of Success: Examination of the leading practices has unveiled seven critical success factors, including strong cooperative within the banking sector, initial launches as peer-to-peer solutions to garner consumer interest, and verticalized merchant sales and marketing to enhance retailer engagement.
Sector Dynamism and Emerging Trends: Anticipated to undergo further evolution, the sector eyes the mid-2024 launch of the EPI in Germany, France, and some Benelux nations. Additionally, early consolidations and cross-market expansions from local solutions indicate a progressing maturity within the sector.
Prospective Directions: Looking ahead, the European mobile payment landscape may develop along one of three scenarios: the establishment of a singular European solution formation of multi-regional clusters, or persistence of the current fragmentation. Each pathway offers unique challenges and opportunities for market players, requiring strategic insight for successful navigation.
The observations shared are based on findings from the “European Mobile Payment Report” by Arkwright Consulting.
The above insights first appeared in POSitivity Magazine 104
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