tl;dr
Digital payments in Europe are projected to grow rapidly in 2025, driven by consumer habits and innovation, with Western Europe leading in digital wallet use. Despite slower adoption in Eastern Europe, countries like Turkey show significant growth. Contactless and instant payments, as well as QR cod...
Digital payments in Europe are set to experience rapid growth in 2025, fueled by evolving consumer habits and technological innovation. Western Europe leads the charge with a surge in digital wallet usage, where approximately 20% of consumers in countries like the U.K. and Germany use digital wallets weekly. Although Eastern Europe has been slower to adopt these technologies, Turkey has shown notable double-digit growth. Across Europe, contactless and instant payments are gaining traction, with QR code usage rising evenly between East and West.
Major players in this expanding market include PayPal, Apple Pay, Visa, and Mastercard, alongside emerging providers such as Klarna, Revolut, Nexi Payments, PayU, and ViaBill. These services are driving the volume of digital transactions to unprecedented levels, reflecting a broader global surge expected to top $3.8 trillion in 2025, led by North America and Europe.
However, recent power outages in Western Europe, affecting up to 50 million people for nearly 24 hours, have disrupted digital payment systems, prompting authorities to recommend tourists carry cash as a backup. Countries like Spain, France, and Portugal advise visitors to keep some cash handy for emergencies, highlighting the vulnerability of purely digital payments to infrastructural issues.
Cash usage in Europe has declined sharply over the last 20 years and is at a historic low, pushed out by convenience, regulatory compliance, and consumer preference for digital solutions. Although European authorities recognize the importance of cash for emergencies and some nations like Sweden and Norway have ensured critical businesses continue to accept it, a full cash resurgence appears unlikely. The ongoing development of central bank digital currencies (CBDCs) and the seamless integration of digital payment methods signal a future dominated by electronic transactions.
This evolving landscape prompts an intriguing question for consumers and investors alike: How will the balance between digital innovation and traditional cash evolve in the context of reliability, convenience, and regulatory frameworks? As Europe embraces a cash-light future, the lessons from recent outages underscore the need for resilience in payment infrastructures.