The Future of Digital Payments in Europe

Europe’s payment landscape is changing fast. From tap-and-go card usage to seamless wallet-based checkouts, digital payments have become an essential part of everyday life for consumers and businesses alike. What once felt like a convenience is now an expectation — and the pace of innovation is only accelerating.

According to Market Research Future, Europe’s digital payment market is projected to grow from USD 27.95 billion in 2024 to USD 131.03 billion by 2035 - a compound annual growth rate (CAGR) of 15%. This growth is powered by evolving consumer preferences, smartphone ubiquity, and the rise of digital-first business models.

But what does this really mean for businesses and consumers?

Digital Wallets Are Going Mainstream

Digital wallets like Apple Pay, Google Wallet, and wearable payment devices are gaining serious ground across Europe. In 2023, 34% of UK consumers used mobile contactless payments at least once a month. For younger generations, wallets are quickly becoming the default method of payment, especially for lower-value or everyday purchases.

For fashion retailers, restaurants, gyms, and transport providers, this trend presents a massive opportunity. Businesses that enable quick, secure digital wallet payments not only improve customer experience but also increase checkout conversion and loyalty.

Card and Contactless Payments Still Reign

While new methods grow, card payments remain dominant. The European Central Bank reports that the number of card payments in the euro area rose 10.3% to 39.6 billion in 2023, with contactless card transactions increasing 16% to 23.2 billion. These figures highlight the demand for fast, frictionless experiences - both online and in-store.

For businesses, this reinforces the need to accept a wide range of payment methods, with a strong emphasis on ease-of-use and minimal barriers at checkout.

Regulation & Security: A New Baseline

With the rise in digital payments comes increased scrutiny. European regulators have introduced robust frameworks like PSD2 (Payment Services Directive 2) to encourage innovation while protecting users. This directive mandates stronger customer authentication and opens the door to Open Banking, allowing businesses to connect with financial data securely.

Consumers increasingly prioritize safety and transparency in their transactions, and businesses that meet these expectations will win long-term trust.

For more on PSD2, see our post: “What is PSD2 and How Does It Affect You?”

What This Means for Businesses

Digital payments aren’t just a tech upgrade — they’re a strategic advantage. For merchants and platforms, adapting to this shift means:

Offering diverse payment methods (cards, wallets, QR, wearable tech)
Leveraging data from payment behaviour to personalize offers
Improving checkout flows to reduce cart abandonment
Expanding internationally by integrating multi-currency and region-specific solutions

And with embedded finance solutions like those from Payme Swiss, businesses can go even further — embedding payments directly into their customer journeys for a seamless experience.

What’s Next?

The European digital payment ecosystem is only getting smarter, faster, and more embedded. As innovations like biometric authentication, AI-powered fraud detection, and real-time bank transfers mature, the bar for customer experience will rise accordingly.

At Payme Swiss, we help businesses keep pace with these shifts — enabling fast, secure, and scalable payment solutions tailored to your market and audience.

The Future of Digital Payments in Europe