Key payment trends post-pandemic
COVID-19 Tips / 03.07.2020
The outbreak of the recent COVID-19 pandemic has shown us that there are no certainties.
This applies to financial institutions, fintech companies, businesses and importantly, to payments as well.
But what will the post-pandemic financial landscape in Europe look like?
How will this affect payments?
Based on research in the fintech and financial space, some key payment trends post-pandemic have been identified, which we share with you below.
1. The decline of cash
The European payments landscape is fragmented.
Countries in southern Europe, like Italy for example, have shown that cash is king, whereas Nordic states have appeared to seamlessly adopt digital payments.
Nonetheless, with government incentives to boost the use of card payments in some countries, and with the onset of the pandemic which emphasised that the use of cash is not hygienic, we’re likely to see a decline in cash payments across the continent.
2. The importance of cards
The World Health Organisation (WHO) indicated that contactless payments should be the preferred payment method during the onset of the pandemic, as these have proven to be more hygienic than carrying cash.
In fact, there was a huge decline in ATM withdrawals in the UK during the pandemic, as an increasing number of individuals chose their contactless cards over cash.
In addition, large financial services providers increased their contactless spending limits in accordance with the WHO’s guidelines, helping more people move in a cashless direction.
The rise of contactless payments is therefore set to continue.
3. The increase in mobile and digital payment services
Mobile and digital payment services are also on the rise.
With millions of people being stuck at home, digital payments and online shopping significantly strengthened as people chose to shop from the safety of their homes.
In addition, the use of mobile wallets also rose, with new adopters taking this option up, while existing users became “super-adopters”.
Meanwhile, according to the 2020 Remote Payments Study, which surveyed over 3 500 consumers in mid-April, it was found that there has been a “sharp increase in consumers’ mobile device usage to accommodate their in-store shopping.”
This study indicated that 72.1% of consumers used their mobile devices while shopping in brick-and-mortar stores this year, which is a significant increase of 53.7% on the 46.9% during 2019.
4. No dominant mobile wallet for the continent yet
Despite all the developments around payments in Europe, no single mobile wallet has emerged as the dominant player on the market.
This means that the ground is ready for key players to enter this space and to effectively compete against other payment providers on the continent.
5. Cryptocurrencies are unlikely to take off
The onset of cryptocurrencies was initially met with some enthusiasm.
However, research indicates that this method of payment is unlikely to advance as quickly as may have been expected.
Although some banks and financial institutions offer cryptocurrencies, adoption rates are currently low in Europe and there are few indications that they’ll pick up in the near future.
As a business owner, accepting payments is a critical step in your business’ lifecycle.
It’s therefore a good idea to keep abreast of all the fintech trends and developments surrounding payments in Europe.
As mentioned above, the use of cash is likely to decline, while card and contactless payments are set to rise due to the perceptions about their safety and hygiene.
We hope that this information will help you plan your business’ future and the ways in which you accept payments more seamlessly.