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The European Central Bank’s (ECB) latest data on payments being made by consumers in the EU reveals growth in all areas, with card payments accounting for more than half of non-cash payments.
The use of card payments in the euro area surged in the first half of 2024, accounting for 56 percent of all non-cash transactions, as the total number of digital payments rose by 7.4 percent to 72.1bn, according to the ECB.
The figures highlight the continued shift towards cashless transactions, with contactless payments playing a part in this.
Contactless card payments saw a 13.2 percent increase, reaching 25.8bn transactions, and their total value rose 13.1 percent to €0.7trn. This rapid growth suggests that consumers are increasingly favouring speed and convenience at the checkout.
Overall, the total value of non-cash transactions grew 1.9 percent to €113.5trn.
Within the wider digital payments landscape, credit transfers made up 22 percent of transactions, direct debits came to 15 percent and e-money payments were 6 percent overall.
The ECB also reported a 4.4 percent rise in the number of payment cards in circulation, to 720.6m — an average of two cards per euro area resident.
Meanwhile, the average value of a card payment stood at approximately €39 per transaction.
Retail payment systems in the euro area processed 52.1bn transactions worth €25.1trn in the first half of the year, reinforcing the region’s growing dependence on digital payment infrastructure.
What does this mean for EU payments?
The evidence that cards are a dominant, and still growing, payment choice is not what the EU’s regulatory overseers will have wanted to see.
The rise in card payments, particularly contactless transactions, strengthens the market position of major card schemes such as Visa and Mastercard, which appear to be as entrenched as ever in the EU’s payments landscape.
These firms continue to benefit from rising transaction volumes and interchange fees, no matter the increased regulatory scrutiny.
However, this could be coming to an end. In the coming years, the EU will deliver a new normal strategy for instant payments, and it is also committed to market solutions such as Wero.
The EU is probably hoping that Wero will replicate the success of national schemes, such as iDEAL in the Netherlands (which has now been purchased by the European Payments Initiative, the owners of Wero) and Twint in Switzerland.
There is also the potential digital euro, which the ECB has only become more motivated to issue, given President Trump’s clear interest in crypto-assets, the sworn enemy of the central bank.
To see these numbers switch and even out, the ECB and its counterparts in Brussels and Paris at the European Commission and the European Banking Authority (EBA) will need to ensure that the legislation they draw up is able to accelerate competition in retail payments.
