Digital payments in Europe grow; Tourists urged to carry cash

Homepage > News > Finance > Digital payments in Europe grow; Tourists urged to carry cash A new report has tipped digital payments in Europe to soar to unprecedented levels in 2025 after an impressive run over the last three years. The report, compiled by ResearchAndMarkets, forecasts a double-digit compound annual growth rate (CAGR) for European-based digital payments in 2025. The report highlights key trend drivers for the forecast, including changing consumer habits and the increasing pace of innovation in the ecosystem. In Western Europe, the report notes that consumers are turning to digital wallets for financial transactions in droves. Per the report, 20% of consumers in the U.K. and Germany rely on digital wallets each week, dwarfing the figures from Eastern European countries. However, despite the slow pace of digital wallet adoption in Eastern Europe, Turkey is braving headwinds and has posted double-digit percentage growth over the last year. Across the board, consumers are having their first brush with stablecoins and digital currencies on digital wallets. However, service providers are walking the tightrope of regulatory compliance across the EU, with the European Central Bank hurtling toward a central bank digital currency (CBDC). A common denominator across the regions is the widespread use of credit and debit cards. While card usage has peaked in Eastern and Western Europe, the report has identified a growing trend in contactless payments, particularly in Germany and France. Furthermore, instant payments are boosting the payment landscape in Europe, while Pay by Bank services are recording similar seismic growth. Monthly transaction volumes for both verticals have reached an all-time high in Q1 of 2025. The use of QR codes across Europe has also reached high levels, with Eastern Europe matching the pace of Western Europe regarding their deployment in payments. Per the report, PayPal (NASDAQ: PYPL), Apple Pay (NASDAQ: AAPL), Visa (NASDAQ: V), and Mastercard (NASDAQ: MA) will be the biggest service providers for digital payments in Europe. Other firms are expected to contribute to the soaring metrics in the region, including Klarna, Revolut, Nexi Payments, PayU, and ViaBill. The rise and rise of global digital payments A previous report by ResearchAndMarkets predicted the global digital payments to exceed $3.8 trillion in 2025, with North America and Europe tipped to lead the charge. Southeast Asia and the rest of the Asia Pacific, driven by Hong Kong and Singapore, will record impressive transaction volumes before the end of the year. Several sectors are already exploring digital payments to keep pace with the changing financial landscape. Governments are scrambling to roll out regulations for the industry with consumer protection at the forefront. Tourists urged to carry cash amid erratic power supply in Western Europe As Western Europe grapples with a wave of power cuts, authorities have urged tourists to turn to cash payments as a backup plan to digital payments. Visitors to Spain, France, and Portugal are advised to convert a small portion of their holdings to cash following widespread disruption to digital payment infrastructure. Recent power cuts in the region have left tourists stranded without access to food and medical supplies. Cash, once the hallmark of commerce in Europe, has recorded a steep decline over the last 20 years, with adoption levels reaching their lowest in the last five years. Alongside the decrease in cash usage is the rise of electronic payment methods in Europe, driven by innovation and changing consumer behavior. While residents are more likely to embrace cash use, tourists are far more likely to rely on a digital wallet for their transactions. Given the range of cross-border payment functionalities, it is easier for tourists to lean on digital wallets than to have access to cash. Another reason for the decline in cash usage revolves around vendors and merchants turning to digital payment systems for seamless accounting and compliance processes. However, recent calls by European authorities making a case for cash use after the power cuts may lead to a resurgence. Western Europe suffered a jarring power cut at the end of April, leaving over 50 million individuals without electricity for nearly 24 hours. As authorities find the remote and immediate causes for the power outage, a cyberattack sits at the top of the pyramid for potential reasons. While digital payment systems have their raft of benefits, the flaw of power outages has beamed a spotlight on the simplicity and efficiency of cash. Aware of the perks, authorities encourage tourists to reserve a portion of their holdings for cash as a backup option. Scandinavian nations of Sweden and Norway have already rolled out guardrails to ensure that critical businesses accept cash despite the wave of digitization. Back in 2023, a cash shortage in Nigeria triggered an economic crisis, adversely affecting critical sectors of the economy. A cash resurgence remains unlikely Despite the widespread calls for embracing cash, there is a slim chance for adoption to become mainstream in Europe. Strides in digital payments in Europe have surged to new highs. Authorities lean toward a CBDC with cash-killing functionalities. Other factors affecting the rise of cash usage include generational shifts, consumer behaviour post-COVID, and ease of digital payments and merchant convenience. Watch: Micropayments are what are going to allow people to trust AI title=”YouTube video player” frameborder=”0′′ allow=”accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share” referrerpolicy=”strict-origin-when-cross-origin” allowfullscreen=””> Source: https://coingeek.com/digital-payments-in-europe-grow-tourists-urged-to-carry-cash/