Market Trends of Europe Real Time Payments Industry
Rising Penetration of Smartphone is Expected to Foster the Market Growth
- The increasing penetration of smartphones across many European countries is increasing the real-time payment market in the region. As per data reported by GSMA Intelligence, the smartphone penetration in Finland at the start of 2023 was 169.5% of the total population. Similarly, in other European countries such as Austria, Germany, Spain, and the United Kingdom was 138.8%, 141%, 119%, and 105% of the total population, respectively.
- Furthermore, the rise of mobile commerce is further proliferating real-time payments in the region as many e-commerce platforms offer real-time credit or buy now pay later services to the e-commerce users in the region.
- Consumers prefer mobile BNPL services due to their affordability and convenience. BNPL, consumer credit, or after-pay enables consumers to pay money only. Some key European players offering BNPL service include Klarna, PayPal Credit, and Splitit.
- Furthermore, the increasing adoption of smartphone usage for real-time fund transfer from Person to Person (P2P) and Person to business (P2B) is further supported by the strong smartphone penetration across the region. These factors are further expected to augment the real-time payments market in Europe over the forecast period.
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United Kingdom is Anticipated to Hold the Largest Share
- Real-time payments have been available in the United Kingdom since 2008 with the launch of the U.K.'s real-time payments system called the Faster Payments System (FPS), operated by Pay. the U.K. in the country. Furthermore, the Faster Payment System also powers Paym, the country's mobile payments service, making it possible to pay family, friends, and small businesses using mobile numbers.
- Furthermore, most financial institutions in the country are participants of the FPS, making it reach millions of people. Moreover, many banking institutions in the region are adopting FPS. For instance, in May 2022, The Bank of London, one of the leading-edge technology companies, announced that it had become a Directly Connected Settling Participant of the Faster Payment System (FPS), the United Kingdom's 24*7 real-time payments infrastructure.
- Payment infrastructure in the United Kingdom is still very much tied to traditional tools, especially cards, despite being easy and cheap for consumers to access real-time payments. Further, real-time payments in the U.K. are still focused on low-volume, high-value transfers, not everyday expenditures. However, the scenario is continuously changing, and the adoption of real-time payments is increasing in the region and is further expected to grow over the forecast period.
- The U.K. further supports the growth of the United Kingdom's real-time payments system. For instance, real-time payments operator Pay. U.K. is modernizing the Faster Payments Service as part of its New Payments Architecture (NPA) program, which also involves procuring a new ISO 20022-ready central infrastructure. The New Payments Architecture (NPA) will be a resilient, scalable platform that will expand the growth of real-time payments in the United Kingdom.
- All the abovementioned factors are expected to boost demand for the UK real-time payments industry throughout the forecast period.
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