In Western Europe, it's common to pay with credit or debit cards for either offline physical purchases in bricks-and-mortar-stores or for online purchases. Indeed, between 2009 and 2015, the total value of card transactions as a share of GDP increased from approximately 13.8 percent in 2009 to approximately 17.8 percent in 2015. In 2015, Visa credit cards reached a market share in terms of purchase volume of approximately 68 percent of the total European market. But there are many differences among the European countries. For example, in Belgium credit cards are until now the leading payment method in online retail in 2017, as 32 percent of respondents indicated they used them. 37 percent of respondents in Sweden, however, named invoices as their most popular online shopping payment method. In Italy, approximately 37 percent of respondents reported that PayPal was their most used payment method on e-commerce websites for both tangible and intangible goods. And while direct debit payments are indeed popular in Poland, approximately 22 percent of the respondents preferred to pay for their online products with cash on delivery.
Other payment methods in Europe include checks and mobile apps on a tablet, smartphone or wearable device. The total number of checks transactions as a payment method faced a decline between 2010 and 2015, reaching 2.2 billion payments in France, 208 million payments in Italy and 64 million payments in Spain. This method of payment is slowly being replaced by the use of mobile payment apps, something which European banks strongly promote. In the United Kingdom, for example, it was found in 2015 that 31 percent of potential users of mobile payment apps stated using them due to a bank recommendation. A very specific type of mobile payment is NFC, Near Field Communication, or contactless payments made at points of sales, with either a debit card or a mobile phone or payments via QR codes. These methods are especially popular in the Netherlands, with support and development coming from domestic banks in the absence of larger FinTech-services such as Android Pay, Apple Pay and Pay from Samsung. In the first quarter of 2017, the share of NFC payments in the Netherlands reached approximately 28 percent of all debit card payments.
One might assume that with a digital wallet, Visa/Mastercard or a domestic debit card all of Europe is covered. This is not the case. Each European country has its own needs when it comes to online and offline payments. This diversity might increase even more, as with the implementation of the Second Payment Services Directive (PSD2) in January 2018, something of which 50 percent of respondents in the Netherlands indicated they never heard of before. This payments-related legislation enables bank customers, both private consumers as well as businesses, to use third-party providers to manage their finances. Companies such as Google, Apple and Amazon effectively gain access to consumers' bank accounts and are able to build financial services on top of the data and infrastructure of banks. Consequently, could it happen that that in the near future every European customer has his or her own way of paying money? Time will tell, but it is certainly an option to keep in mind if online retail does not want to miss out on potential revenue.