European Payments Study 2025

The European payments landscape is evolving at an unprecedented pace, driven by the accelerating shift from cash to digital payments and shaped by regulatory and technological advancements.

As consumer preferences change and digital solutions become the norm, businesses must navigate a dynamic environment where market trends, compliance requirements and innovation intersect.  

This study explores the key transformation drivers in Europe’s payment ecosystem, offering insights into the challenges and opportunities that lie ahead for industry stakeholders.

Market trends: the shift from cash to digital payments

The European payments market is undergoing a significant transformation as the shift from cash to digital payments accelerates. Cash usage is steadily declining, while digital methods such as cards, mobile wallets, and account-to-account (A2A) payments are becoming the norm. Younger generations are driving this trend: over 60% of Europeans aged 18–35 rely on mobile wallets for their daily transactions. While countries like Sweden and Finland are leading the change toward cashless societies, adoption rates vary across Europe due to differences in consumer preferences and technological infrastructure.

Payment methods: the rise of account-to-account solutions

A2A payments are emerging as a key driver of innovation in Europe’s payment ecosystem. Across the continent, initiatives are fostering regional integration and cross-border interoperability. These efforts reflect a broader push to create more seamless and efficient payment systems while responding to consumer demand for convenience and flexibility. As A2A solutions gain traction, they are poised to complement existing payment methods and further accelerate the shift toward digital-first ecosystems and even threatening the position of incumbent banks by taking over the customer interface.

Regulation: shaping transparency and security in payments

Regulatory developments continue to play a pivotal role in shaping Europe’s payments landscape. Initiatives like the Payment Services Directive 3 (PSD3) and the Payment Services Regulation (PSR) aim to harmonize the ecosystem by enhancing security and transparency for consumers. Meanwhile, the European Central Bank’s digital euro project represents a long-term effort to introduce a government-backed digital currency, though its impact may be less transformative than initially anticipated. Additionally, regulations mandating instant payments across the Single Euro Payments Area (SEPA) have yet to significantly boost adoption, highlighting the complexity of driving widespread change in payment behaviors.

Technology: transforming payments through innovation

Technological advancements are revolutionizing the payments industry, reshaping both consumer behavior and competitive dynamics. Cybersecurity remains a top priority as digital transactions grow, while artificial intelligence (AI) is increasingly being used for fraud detection and prevention. Businesses are also embracing embedded finance and omnichannel solutions to deliver seamless experiences across platforms, which will be further fostered by the upcoming FiDA framework. These innovations are not only enhancing operational efficiency but also redefining how consumers interact with payment systems, paving the way for a more integrated and secure future.