The Times They Are a-Changin

The transition to digital wallets and real-time payments in Europe

A sovereign payment system for Europe seems to be the topic du jour in European payments. The ECB¹ sees it as a way of reducing reliance on international (American) card networks and on non-European alternatives such as PayPal and Alipay (even though its market share in Europe is tiny and it opens European retailers to tourists and online buyers from China).

The ECB’s objective for a sovereign European payments system is to make a case for their rather quixotic Digital Euro². However, regardless of intent, with digital wallets using real-time Account-to-Account (A2A) payments in the ascendancy across the world, the time is ripe to move away from card networks, replacing them with these digital wallets which, where available, consumers are adopting at scale.

The good news is that Europe has a great starting point for this transition with a vibrant set of mainly country-specific digital wallets with real-time A2A and real-time A2A clearing systems, most established for some time already.

Instead of sovereignty, the real issue is what will European payments look like in five- and 10-years’ time and how they get there from today’s starting point - consolidation, co-existence/interoperability, replacement or something else?

Starting point

Table 1 lists the real-time A2A clearing systems and digital wallets in the European countries with a national currency. All have real-time A2A clearing systems and six have digital wallets, available to a total population of 89m, or about 46% of the total of these countries.

Table 1 – Real-Time Clearing Systems and Digital Wallets in Europe – Non-Euro Zone

Similarly, Table 2 lists the real-time A2A clearing systems and digital wallets in the Euro Zone countries. All have access to real-time clearing using the SCT Inst scheme through the ECB’s TIPS system, some additionally have banks using EBA Clearing’s RT1 system and some have their own clearing system. 11 of the 20 Euro Zone countries have their own digital wallet, covering a combined population of 300m, or 86% of the Euro Zone - although four countries have adopted the Wero wallet only recently which is limited to P2P payments for now.

Table 2 – Real-Time Clearing Systems and Digital Wallets in Europe – Euro Zone

Tables 1 and 2 show that Europe has more than enough infrastructure for real-time A2A payments and that 72% of the population of 540m has access to a digital wallet.

This is a great starting position and the scene is set for continued adoption and increased use of digital wallets with real-time A2A payments across Europe.

Real-Time Payments per Capita

In my view the key metric to measure the transition away from card networks is real-time payment transactions per capita. This metric is preferable to payment value as it measures interactions and avoids the complication of comparing across different currencies and economies.

In a previous article³ comparing payments in a selection of countries around the world I combined this metric with card payments per capita to get a holistic view. In the analysis, I calculated this cards metric to range from an average of 231 annual card payments per capita in the Euro Zone, to 287 in Poland and 458 in the UK. This range provides a useful comparator to measure progress in Europe of real-time payments adoption, whether generated through online/mobile banking, open banking or digital wallets.

Figure 1 shows the real-time payment transactions per capita in 2024 for the countries in Europe where separate data is available, for all Europe and for the Euro Zone (the ECB publishes data by country for credit transfers but without separating out SCT Inst transactions, other than stating⁴ that 15% of Euro Zone credit transfers are SCT Inst).

Switzerland has the highest value at 122 real-time payments per capita⁵, a long way below the floor of the card payment range. However, by tracking this metric each year, we will be able to see how Europe is making progress adopting real-time payments and how countries compare with each other.

It is my hypothesis that those countries with digital wallets using real-time A2A payments will progress the fastest and have the highest adoption rates.

Figure 1 – Annual real-time payments per capita in Europe (inter-bank and on-us, excludes PayPal)

The country metrics in Figure 1 include on-us payment volumes⁶. As a result, they are a little higher than those shown in previous articles which excluded on-us payments.

On-us payment volumes are published rarely⁷ but they can be approximated from the number of major banks in a country and their customer numbers. In the UK, for example, I estimate on-us volumes equate to an additional 18% on top of Faster Payment SIP volumes.

PayPal payments are also instant and are substantial in some countries. There are no published figures from PayPal I can find that quantify these volumes directly but they can be estimated roughly from other figures PayPal publish. I calculate from the 26.3bn payments PayPal processed in 2024⁸, 1.3bn are in the UK and 4.3bn are in the rest of Europe, mainly France, Germany and Italy. These figures are excluded from Figure 1 but would add 19 real-time payments per capita to the UK metric and 11 to the Total Europe metric. As such, it is worth tracking PayPal volumes in Europe when monitoring real-time payment volumes overall.

Cash Withdrawals

As an additional metric, in Figure 2 I show the cash withdrawals per capita in Europe overall and for those countries which publish the data. The Nordic countries have shown how low cash usage can drop measured by cash withdrawals, with Norway the lowest at three withdrawals per capita in 2024. Other countries are much higher, with Europe as a whole averaging 15 withdrawals per capita in 2024.

Figure 2 – Annual cash withdrawals per capita in Europe (ATM and bank branch)

Cash usage, hence cash withdrawals drop with increased use of card payments and digital wallet payments. Tracking cash withdrawals per capita is a useful metric to measure changes in consumer payment preferences, complementing the real-time payments per capita metric.

Paths to Real-Time Payment Adoption Through Digital A2A Wallets

Each of the digital wallets in Tables 1 and 2 are bank-owned or owned by a consortium of banks, all on a national basis with the exception of Wero, which has member banks across five countries and Vipps which operates in three countries (two under the MobilePay brand). It follows that for the countries with their own currency, those already with a digital wallet will continue to scale their wallets and those without one will eventually develop their own through their local banks.

The same is probably true of the Euro Zone. The banks in each country in the Euro Zone without a wallet will determine a wallet for their country – no bank on its own is likely to develop a successful wallet, it needs a consortium of banks covering the majority, possibly all the banked population within a country. Their choices are to build their own wallet, white label an existing one like Bizum or MBWay or to join an existing one directly. EPI, which owns Wero, may also expand across the Eurozone through wallet acquisitions. It has for example acquired iDEAL in the Netherlands which the Wero wallet will replace eventually. Also, Vipps has merged wallets successfully from three Nordic countries on to one platform and could continue expanding across Europe through acquisitions.

Only about 3%⁹ of payments in Europe are cross-border within Europe i.e. a consumer in one European country makes a payment in another European country. Therefore, with 97% of payments made within a country it is inevitable that digital wallets are country-specific unless a multi-country strategy is used as EPI is doing with Wero. However, it is important that wallets support the 3% of payments which are cross-border in Europe which is a big challenge for such a low increase in volume.

For the Euro Zone, with a single currency cross-border interoperability should be easy to achieve. All it requires is a central SCT Inst Euro clearing system which any European clearer can provide, especially ECB TIPS and EBA Clearing which are connected already to most banks in the Euro Zone. China has proven this approach works very successfully with the Nets Union Clearing Company which enables interoperability between China’s proprietary non-bank wallets, especially between the dominant Alipay and WeChat Pay wallets. It also requires interoperability in acceptance, in-store and online using QR codes and/or NFC protocols but this is easily done, as demonstrated by PayNow in Singapore.

For the non-Euro wallets, interoperability is trickier but again it is important, especially with the Euro Zone to improve their utility. EMPSA’s mobile roaming, Pay Like At Home approach to solve for this looks promising and is making progress with its EuroPA initiative¹⁰.

However, there is a major gap between digital wallets and the international card networks to address. A key feature of cards is their global acceptance. A Visa card or Mastercard card issued by any bank in any country can be used almost everywhere in the world. Even if Europe has a single sovereign payment system and wallet used within Europe by all 540m Europeans, how would it be accepted in the rest of the world when they travel abroad? Making it interoperable with payment systems in other countries will be even more difficult than interoperability within Europe. This is why EMPSA’s mobile payments roaming approach is a powerful one, it could become scalable globally, even though this is outside their stated goals.

It is also why Visa and Mastercard will endure for a very long time to come. Whatever their approach and success in addressing digital payments, demand for cross-border use of their card networks will remain. Potentially without competition from regional digital wallets, for many years after cards have diminished in domestic use, which itself is still a long way off for many countries.

Conclusion

Europe has a strong starting position to develop and scale digital wallets with real-time A2A payments. With 97% of payments between the banks within each country, it is likely that these digital wallets will develop and scale by country, except for multi-country initiatives like EPI’s Wero and Vipps.

Solving for interoperability between wallets within Europe will be important but so will global interoperability.

How these wallets develop and the paths they take from here is anyone’s guess. My hypotheses are that those countries with digital wallets using real-time A2A payments will displace card volumes; and that their progress will be the fastest and have the highest adoption rates compared to online/mobile banking and open banking which also generate real-time payment volume.

I will test these hypotheses for Europe over the coming years through the real-time payments per capita metric, complemented by the cash withdrawal per capita metric and through keeping track of PayPal volumes in the region. I will be doing the same for other regions in the world covering the march of real-time payments in Africa, Asia, Latin America, Middle East and North America as well as in Europe.

Look out for these in later articles.

1. ECB president: https://www.flexi-news.com/post/lagarde-urges-eu-to-break-dependence-on-u-s-payment-giants-visa-and-mastercard

2. ECB speech: https://www.ecb.europa.eu/press/key/date/2025/html/ecb.sp250408~40820747ef.en.html#:~:text=The%20digital%20euro%20%E2%80%93%20as%20a,control%20over%20its%20financial%20future.

3. World payment comparison: https://jeremylight.substack.com/p/the-landscape-is-changing?r=axqgy

4. ECB payments press release: https://www.ecb.europa.eu/press/stats/paysec/html/ecb.pis2024h1~5263055ced.en.html#:~:text=Card%20payments%20accounted%20for%2056%25%20of%20the%20total%20number%20of,see%20annex%2C%20Table%201

5. Most of the real-time payments in Switzerland are made through the Twint wallet. Twint states that their payments are “simulated real-time” as settlement between the sending and receiving bank occurs later. However, this is consistent with other real-time payments such as FPS in the UK and I consider Twint real-time for the purpose of the analysis here.

6. When making a payment, typically a payer has little knowledge of whether the payee is at the same bank and cares even less, so it makes sense to include payments between customers of the same bank, on-us payments, which are instant normally, as well as those payments that clear through real-time clearing systems.

7. The Denmark National Bank is one of the few that publishes on-us volumes: https://nationalbanken.statistikbank.dk/statbank5a/default.asp?w=1536?w=1536

8. PayPal 2024 Annual Report p13: https://s205.q4cdn.com/875401827/files/doc_financials/2025/ar/PYPL_BMK.pdf

9. Based on my analysis of debit card data from the UK and ONS data on visits to Europe from the UK as a proxy for all cross-border travel and payments within Europe.

10. EuroPA: https://www.finextra.com/newsarticle/45741/european-payment-schemes-turn-on-instant-cross-border-money-transfers