Coronavirus key as world shifts to digital payments

The coronavirus pandemic is accelerating a worldwide trend towards contactless payments, according to a new report from the Emerging Payments Association EU (EPA EU), which was commissioned by Luxembourg for Finance (LFF).

Key takeaways from this include: Debit cards remain Europe’s preferred way to pay across all age groups. The EPA argues for the continent to “shine in a digital world, local networks and solutions need to be interoperable and frictionless across the EU”.

In the US, more traditional credit and debit providers are under attack from big technology and nimble digital players. Apple Pay is now accepted in 60% of US retail locations, and one estimate suggests that Trustly, a digital account-to-account payment scheme, saw a US growth rate of approximately 600% in 2019.

In Asia, meanwhile, UnionPay has enjoyed a virtual monopoly in the electronic payment systems landscape, with more than six billion cards in issue as of June 2019. The company is now looking further afield to Europe, but local giants Alipay and WeChat are also expanding abroad.

Nicolas Mackel, CEO at Luxembourg for Finance, says: “The switch to digital payments looks set to happen much quicker than the shift to cards did in the past. The method of payment is becoming less important than the platform used, to the extent of becoming invisible. This report highlights the countries that have been early movers and are demonstrating best practice in the payments space.”

Thibault de Barsy, General Manager of EPA’s EU office, adds: “Despite being covered by the same regulation and having access to similar technologies, European consumers’ use of cashless payments differs drastically from one country to another. Nonetheless, instantaneous execution and openness of choice are the universal ingredients of success.”