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The march of mobile payments across Europe

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As consumers embrace contactless payments, mobile payments seems inevitable – but while European consumers are interested there are some things holding them back. Paul Skeldon takes a look at a pan-European study that shows just where m-payments is at right now and what needs to happen to make it mainstream

Across Europe consumers are showing a strong interest in new payment methods such as e-wallets, banking apps, QR code scanning and digital currency and there is a huge shift towards contactless payments – often seen as the pre-stage to a move to mobile payments – going on. Shoppers want mobile payments.

So finds the Masterindex 2017, a new Mastercard report on e-commerce and payment trends across the continent. The report included a survey 43,000 consumers in 23 European markets and it suggests that one in four Europeans with access to the internet purchased products or services online at least once a week in 2016.

However, at the moment that interest is not translating into use, as is typical with new innovative technologies, it can often take time to be adopted by users. The important thing from an e-commerce and payment perspective is that the motivation is there and with so many different options for consumers, the practicality of shopping online becomes easier.

According to the wide-ranging study of ecommerce habits, for one in three European online shoppers cards and online banking are the most used form of online payment from mobiles. Just under a fifth use online banking apps and only two per cent use digital currency.

Overall, interest in online banking apps (35%) is similar to e-wallets (35%) across Europe, pointing to potential for growth in these categories. In contrast, Europeans seem least open to digital currencies (11%) among all categories surveyed. Looking at the individual countries, Spain leads the way in interest in new technologies, with over half the people interested in e-wallets and 1 in 3 interested in contactless. However, only 14% of Spaniards use the technology, lagging behind Norwegians (20%), Greeks (20%) and Finns (19%).

When we combine this interest in innovative payment methods with the fact that consumers don’t feel that skills or acceptance of paying online are big barriers we can see that the conditions for continue growth of e-commerce are there. It is up to the market to attract increased use and more consumers through offers, convenience and reliability.

One of the most interesting emerging payment trends is that of contactless payments. Whilst contactless is an in-store purchase method it is often seen as a step towards the use of mobile phones as payment devices. The Masterindex shows that 43% of the cards in Europe are contactless enabled, however there are wide discrepancies across countries. In Poland and Czech Republic, nearly 90% of the cards are contactless enabled. However in Germany 83% of cards are not contactless enabled and this number is 90% in Belgium.

7% of Europeans use contactless payments on a daily basis, 26% using it once a week and 38% once a month. However, nearly half of the population has never used it.

The study goes on the find that the British are the most avid online shoppers in Europe. While uptake of e-commerce is high across Europe, the research reveals interesting differences from country to country in terms of how often people shop online, what types of things they purchase, and their preferred payment methods.  At a time when European policy makers are looking to break down barriers to cross-border e-commerce, the Masterindex highlights different national attitudes to buying from sites in other countries.

UK internet users come out as the most regular users of e-commerce in Europe overall. 8% of the UK population shops online every day, and 41% shop online every week.  This is the highest in Europe, followed by 32% in Ireland. In contrast, Finns (17%), Estonians (16%) and Danes (16%) are far less likely to buy something on the internet at least once a week.

Across Europe there is a significant increase in activity when comparing daily to weekly frequency. This is because the types of things people buy online are less likely to be everyday items. Clothing and footwear is by far the most popular category overall (48% European average) followed by tickets (34%), electronics (33%) and books (31%).

Brits who shop online (33%) are twice as likely to buy their groceries on the internet as their nearest continental neighbours in the Netherlands (16%), France (15%) and Belgium (13%). Attitudes also vary on preferred methods of buying online. In the Czech Republic, Germany, Netherlands and Poland online banking is twice as popular as cards. But in countries UK and Ireland, cards remain the most popular payment methods by some distance.

Despite different trends from country to country, people across Europe tend to share similar concerns about online shopping. Fear of fraud is the number one reason for not buying online in all countries surveyed.

Among the key factors to delivering on growth, both cross-border and domestically, appear to be continued efforts to build trust and confidence in e-commerce, and, critically, ever improving online offers and conditions.

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