The payments market is predicted to expand throughout Europe until 2020 at a year-over-year rate of around 7 percent, driven by the growth in overall payments volumes and new types of payments, such as account-to-account (A2A). This is according to analysis by global management consultancy Oliver Wyman, in its European Retail and SME Payments report.

Currently, the management consultancy believes the European payments market revenue pools to amount to approximately €38 billion, covering a total of €190 trillion worth of transactions across a number of payments methods, which will grow to ~€55billion by 2020.

The report investigates all major payments instruments and types across 28 markets in Europe, excluding remittances, wholesale and bank-to-bank transfers, and cross-border payments – and outlines the following future trends:

  • Growth in acquiring revenues on traditional payment types may have peaked, but this is being offset by the growth in value-added services.
  • Growth in account fees
  • A2A will provide the impetus for additional revenue pools
  • Card use will continue to grow although the growth in some markets will be slowed by the adoption of A2A transactions
  • While in Italy and Iberia cash use is still expected to remain significant, electronic transactions (cards and A2A) are in the growth mode in the UK and Ireland, and in France and Benelux

Matthew Sebag-Montefiore, partner, Oliver Wyman, and lead author of the report, says: “The payments market is dynamic but remains a scale industry. At-scale players participating in all areas will perform well, but many players are not at scale. They either need to have specific value-added services or consider participating in consolidation. Banks where payments serve as a non-core activity, for example, will need to decide either to become more committed or pull out altogether.”

The report advises that as a result of changes in the regulatory and technology landscape, players must consider their business response to the future payments scenario. Included is a health checklist for all player types, enabling them to see if their business is on course to succeed in this ever-changing market.


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