With a solid digital infrastructure, a forward-looking approach to payment regulations, and high bank and Internet penetration rates, Europe has historically had a privileged position in the global payments ecosystem. However, despite aiming for integration and cooperation, it remains shaped by contradictions and fragmentation. With only 20 out of its 27 member states using the euro, crossborder payments remain complex and fraught with challenges due to underlying siloed systems. Moreover, although the EU has made significant efforts to promote innovation and local payment players, US giants like Visa, Mastercard, or Apple still dominate part of the payment infrastructure.

Only six months into 2025, Europe has had to face geopolitical tensions and economic uncertainties, including an unexpected trade war with the US and growing fears of a recession. In spite of the lessthan-ideal context, Europe has remained committed to its efforts to consolidate its payment landscape. Just like in previous years, the market is working to modernise and digitalise its payment ecosystem and encourage collaboration. 2025 is anticipated to bring several key developments in the payments sector, including the introduction of real-time, 24/7 payments under the SEPA Instant Payments Regulation, the launch of the digital euro, the publication of the final version of the PSD3, and the final preparations for the 2026 rollout of the EU Digital ID Wallet, just to name some of the most notable ones.

When it comes to payment preferences among European consumers, despite governmental efforts and the noticeable rise in the popularity of digital payments, the idea of a cashless Europe remains just that, an ideal. As data from the second part of this whitepaper shows, in both the Eurozone and noneuro countries, consumers remain faithful to cash, even in mature markets like France or Germany. Moreover, in the Nordics, where consumers show a strong preference for cashless transactions, there is still a clear cultural and governmental commitment to preserving access to cash payments. While the move away from cash is likely to continue, Europe’s strong attachment to cash is not going away, especially as the recent massive blackout in Spain and Portugal (in April 2025) showcased how vulnerable cashless payments are to disruptions.

Card payments remain similarly well-positioned among customer preferences. While some markets use domestic card schemes (Bancontact in Belgium, Cartes Bancaires in France, Dankort in Denmark, just to name a few), European countries remain reliant on global networks, with Visa and Mastercard fighting for the first position in their market share.

In response to the European over-reliance on global networks, in the second half of 2024, the European Payments Initiative (EPI) launched Wero, a unified account-to-account (A2A) solution that is meant to become the European standard for consumers and merchants for in-store, online, and person-toperson (P2P) transactions. Wero leverages the SEPA Instant Credit Transfer protocol as well as existing A2A rails to enable users to send and receive payments in 10 seconds. Initially, Wero was launched in France, Belgium, and Germany as a P2P payment solution. However, beginning in the summer of 2025, merchants will be able to accept Wero for ecommerce payments in Germany, followed by Belgium in October, and then France, Luxembourg, and the Netherlands in 2026.

Although it was envisioned as a pan-European initiative, some European banks have withdrawn from EPI and opted to join EuroPA, an alternative instant-payment solution linking Portugal’s MBWay, Spain’s Bizum, and Italy’s BANCOMAT. Norway, Denmark, Finland, Sweden, and Poland are expected to join EuroPA by 2026.

According to Worldpay’s recent report, digital wallets remain the top choice for European consumers when shopping online, with global wallets like Google Pay, PayPal, and Apple Pay competing with domestic players. Therefore, previous payment digitalisation efforts have not been in vain, as European consumers have steadily embraced the use of e-wallets. In 2025, the European digital wallets ecosystem took a step forward towards fair competition with the launch of the European Commission’s Digital Markets Act (DMA), which broke Apple’s monopoly on iPhone contactless payments in the EU and gave consumers the choice to opt for their preferred default wallet app.

Fintech companies have had a significant impact on Europe’s financial infrastructure, with a wide range of diverse solutions being spread across the region and bringing significant domestic value for the continent’s domestic markets. In 2025, Europe continues to be a thriving hub for fintech companies. Following a period of stagnation, in Q1 of 2025, funding into the European fintech space saw an 85% increase quarter-over-quarter. This is in part a result of investors’ appetite for more substantial deals, as the number of over EUR 100 million deals experienced a 2.6-fold rise quarter-over-quarter.
 

Conclusion

Even though Europe’s payment landscape is fraught with interoperability challenges, efforts to make it more connected have recently gained speed, which may result in a more cohesive and simplified payment ecosystem. Although individual countries have created highly efficient domestic payments systems, work is still needed for the same to be true about cross-border transactions.

With new regulatory changes on the horizon (SEPA, PSD3, IPR), initiatives such as the digital euro and EPI, the growing role of blockchain-based solutions in cross-border infrastructures, and the rising interest in central bank digital currencies (CBDCs), significant change is on its way. However, given that, historically, Europe has not been an advocate of the “move fast and break things” approach to innovation, the future will most likely follow the same path of incremental changes that gradually lead to major transformations.