Digital wallet use is increasing, earning the top spot as a preferred alternative payment method.
In Europe, for example, Big Tech mobile wallets like Apple Wallet and Google Pay, which have surged in popularity in recent years, hold a significant market share.
Data from Italy-based digital payments solution provider Nexi Group shows that mobile transactions at the point of sale (POS) surged by 139% in the first six months of 2022 compared to the same period in 2021, with 90% of the 6 billion euros (about $6.3 billion) generated via purchases made using the Apple, Google and Samsung payment apps.
As a result, Nexi Head of Digital Issuing Products and Mobile Payments Manager Emiliano Imbimbo is of the view that these “digital giants” are key growth enablers in the region’s digital payment ecosystem.
“Because their solutions are based on cards, [digital wallets like Apple Pay and Google Pay] support the digitalization of payments through payment cards,” he told PYMNTS in an interview. “And thanks to the better user experience and the wider adoption they have [among] the population, we see them as a big enabler for the market.”
And although Italy also has its own homegrown mobile wallets, such as the Satispay app, which is used by around 3 million people and accepted by around 200,000 local merchants, Imbimbo added that contactless transactions via Big Tech wallets are “driving the market,” especially in Italy and are where the “real innovation” has happened at the POS.
Non-Card Wallets Strong in eCommerce, Nordics
While card schemes still play an important role in Europe’s POS payments space, their dominance is tested in the eCommerce space.
Imbimbo said competition from other alternative payment methods in the eCommerce space is fast-growing, with options such as buy now, pay later (BNPL) and account-to-account (A2A) payment rails taking a bigger share of the market.
On A2A payments, he pointed to the Nordics as one area where they have gained traction in recent years, particularly in Sweden, where “those kinds of solutions transact more volume than cards.”
It’s the reason why Nexi tailors its payments offering depending on the market it is catering to, he added.
“The aim [is] to offer our merchants payment solutions that will [guarantee] the best conversion in every single market according to the payment needs the specific population has,” Imbimbo said.
To take things up a notch, he said the firm also needs to adapt its strategy to the different levels of digital payment uptake across the continent.
In Italy, for example, where cash payments remain popular for in-store transactions, cash use fell to less than half of payment volumes for the first time in 2021, accounting for 48% of all transactions.
While Imbimbo acknowledged the significant milestone in digital payments growth, he said Nexi doesn’t plan to rest on its laurels given the huge gap that remains.
“Our main objective [now] is to work on that gap,” he said.
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