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Financial Services Article

Alternative Payment Methods in EU & UK: How Europeans Are Paying in 2024?

In case you missed it, alternative payment methods (APMs) are rapidly gaining popularity worldwide.

As the world moves towards a cashless economy, alternative payment methods (APMs) are reshaping how consumers in the EU and UK pay for goods and services. With significant growth in e-commerce and cross-border trade, each country demonstrates unique preferences based on its local payment landscape.

Currently, digital wallets comprise 50% of global online payment transactions, while the Buy Now, Pay Later (BNPL) sector is projected to reach a transaction value of $442.62 billion by 2027.

For businesses looking to improve checkout experiences and capture a broader audience, APMs offer a way to create a more seamless, customer-friendly payment process—whether for online or in-person sales.

What Exactly Are Alternative Payment Methods?

Put simply, alternative payment methods are non-cash and non-card payment options. While they may seem unconventional, APMs are actually the standard in some regions. Many markets prefer methods like digital wallets or bank transfers over traditional credit cards or cash. For simplicity, we’ll stick with the term “alternative payment methods” throughout.

 

4 Benefits of Alternative Payment Methods?

Here are four compelling reasons why businesses are making the switch to APMs:

  1. Cater to Consumer Preferences Payment habits are evolving—cash and cards are no longer the primary options. For example, more than a quarter of consumers now pay by tapping their phones instead of carrying a wallet, and QR code transactions are projected to exceed $2.71 billion by 2025. By offering APMs, you can align with these trends and cater to changing consumer preferences.
  2. Lower Payment Processing Costs Local payment methods can save businesses up to 49% compared to credit and debit card fees. As your business scales and transactions increase, these savings can make a significant impact on your bottom line.

  3. Enhance the Mobile Experience Global revenue from mobile eCommerce sales is projected to soar to $3.35 trillion by 2028. With mobile commerce booming, now is the time to streamline your mobile checkout. APMs such as digital wallets are optimized for mobile and in-app payments, making it easier for customers to pay quickly and securely—right from their devices.

  4. Unlock Global Expansion APMs allow you to meet local preferences in new markets, establishing trust with customers who may not be familiar with your brand. By offering the payment methods people are used to, you not only make purchasing easier but also build credibility in new regions.

 

Famous Types of Alternative Payment Methods

There’s no one-size-fits-all when it comes to APMs, but here are some of the most widely used types:

  • Digital and Mobile Wallets Digital wallets, such as Apple Pay, Google Pay, Alipay, and WeChat Pay, allow users to store payment information for easy and quick transactions, especially on mobile.
  • Buy Now, Pay Later (BNPL) BNPL providers like Klarna and Afterpay give customers the option to pay over time, often with zero interest. This flexibility has made BNPL a fast-growing favorite worldwide.
  • Direct Debit Direct Debit lets customers authorize payments directly from their bank accounts. It’s commonly used for subscriptions but is increasingly available for one-click purchases as well.
  • Online Banking In some regions, online banking payments are the preferred method. For instance, iDEAL dominates in the Netherlands, while Pay Easy in Japan allows customers to pay at ATMs.
  • Pay by Bank With this option, customers pay directly from their bank accounts, bypassing card details altogether. Pay by Bank is not only user-friendly but also provides a highly secure checkout experience.

 

Global Snapshot of Alternative Payment Methods


1. Poland: BLIK Dominates, While PayPal and Klarna Gain Ground

Poland stands out with its high adoption of BLIK, a mobile payment system used by 75% of the population. This locally-developed platform enables consumers to pay both online and in-store using a simple mobile code, and it has quickly become the go-to choice for Polish shoppers. PayPal is used by 35% of Poles, primarily for cross-border purchases. Klarna, a buy now, pay later (BNPL) provider, is also gaining traction, with 25% of the population utilizing its services for flexible payments. The rise of APMs like BLIK reflects a broader trend in Poland towards digitalized, mobile-friendly payment solutions.

 

**2. Sweden: Swish and Klarna Lead a Highly Digitalized

Sweden is one of the most advanced digital payment markets in Europe, with 70% of Swedes using Swish, a popular local mobile payment app, for quick and secure payments. PayPal holds a solid presence, and it is used by 48% of the population, especially for cross-border transactions. Klarna, a Swedish-born BNPL solution, is used by 60% of Swedes, making it one of the highest adoption rates in Europe. The prevalence of Swish and Klarna demonstrates Sweden’s early embrace of both mobile banking and flexible payment solutions.

 

3. Portugal: Multibanco and a Growing Interest in BNPL

In Portugal, 68% of consumers rely on Multibanco, a nationwide interbank network that offers a convenient way to pay online and in-store. Although Multibanco remains dominant, other APMs like PayPal are increasingly popular, with 45% of users opting for it in cross-border e-commerce. Klarna is still growing, with an 18% adoption rate, particularly appealing to younger consumers. Portugal’s payment ecosystem reflects a blend of traditional bank-linked methods and the gradual adoption of newer, flexible payment options.

 

4. France: Carte Bancaire Reigns with Steady Growth for Klarna

Carte Bancaire (CB) is a prominent local card network used by 64% of French consumers. It’s particularly trusted for online shopping, making it a staple in France's payment landscape. PayPal is widely accepted, with 60% of French shoppers using it for digital transactions, especially for international purchases. Klarna has established a foothold in France, with 20% of the population using it for instalment payments. As the e-commerce market expands, France’s reliance on secure, local methods like CB continues alongside the rise of PayPal and Klarna.

 

5. Netherlands: iDEAL Dominates, while PayPal and Klarna Thrive

In the Netherlands, iDEAL is the preferred payment method, used by 64% of the population for online purchases. This bank-based payment option facilitates direct transfers, making it a secure and favored choice for Dutch shoppers. PayPal is also popular, with 40% of the population relying on it for cross-border transactions. Klarna, used by 22%, has become a common choice for those seeking instalment payment options. Together, these options illustrate the Dutch preference for secure and flexible online payment solutions.

 

6. Germany: Sofort, PayPal, and Klarna Power a Dynamic Market

Germany’s payment landscape is diverse, with 60% of Germans using Sofort, a direct bank transfer service, for online transactions. PayPal remains strong with 55% usage, particularly for cross-border shopping. Klarna has gained considerable popularity, with 35% of Germans taking advantage of its BNPL options. Germany’s adoption of multiple APMs highlights a preference for secure, direct banking options alongside the growing demand for flexible payments.

 

7. Spain: Bizum and the Rise of Digital Wallets

In Spain, Bizum has quickly gained a stronghold, used by 60% of consumers for instant bank transfers. PayPal is used by 54% of the population, especially for cross-border e-commerce. Klarna, used by 28%, has become a popular choice among Spaniards, particularly for purchases in fashion and electronics. Spain’s APM landscape reflects a blend of bank-driven solutions and growing interest in flexible payment methods like Klarna.

 

8. Austria: EPS and the Steady Growth of Digital Wallets

EPS, a local online payment method linked to Austrian banks, is favored by 55% of Austrians, particularly for e-commerce. PayPal enjoys a 50% usage rate, supporting cross-border transactions. Klarna, meanwhile, has made notable inroads, with 32% of Austrians using its BNPL services. Austria’s preference for secure, bank-based methods underscores the importance of trust in digital payment solutions.

 

9. Italy: Postepay and the Increasing Appeal of BNPL

Italy’s payment market is heavily influenced by Postepay, a prepaid card widely used by 52% of the population for online transactions. PayPal is popular, with a 58% usage rate, reflecting Italians' comfort with digital wallets for cross-border shopping. Klarna, used by 30%, appeals to those looking for installment-based payment flexibility. Italy’s payment preferences show a blend of traditional and digital methods driven by consumer demand for both security and convenience.

 

10. United Kingdom: Faster Payments, PayPal, and Klarna Shape the Market

In the UK, Faster Payments is a well-established local payment system used by 45% of the population for quick bank transfers. PayPal leads with a high 70% usage rate, especially for online shopping. Klarna has also grown substantially in the UK, with 40% of consumers taking advantage of its BNPL offerings. This blend of instant bank payments and flexible options positions the UK as a diverse and adaptive market for APMs.

 

What To Consider Before Integrating APMs?

As you prepare to add APMs to your business, keep these factors in mind:

  • Customer Preferences: Focus on the payment methods your target audience already uses.
  • Security: Ensure that you have robust fraud prevention measures in place.
  • Compatibility: Make sure the APMs integrate smoothly with your current systems.
  • Legal Requirements: Be mindful of regional regulations for each payment method.

 

For businesses navigating Europe’s complex payment landscape, Plusius acts as a powerful payment partner that offers financial infrastructure and gateways to local payment networks, including unique access to Sweden’s RIX payment network.

With Plusius, companies can tap into a comprehensive financial infrastructure that effortlessly integrates with popular local methods like iDEAL, Swish, BLIK, and more. By connecting through Plusius’s single API, businesses can simplify cross-border transactions, speed up settlement times, and manage multiple payment options all in one place. This makes it easier for businesses to cater to local preferences, expand their reach, and streamline financial operations across the EU and UK.

Stay ahead of payment trends and make checkout easier for everyone with Plusius—a solution built to support businesses in the fast-evolving world of digital payments.

Unlock seamless payment solutions across the EU and UK with Plusius gateway to efficient, secure payment processing and a complete payment ecosystem. Contact us to explore tailored solutions for seamless transactions.

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