Essential 2024 Trends in Digital Wallets and Payments
According to a new report, as we approach 2024, Europe is witnessing a shift towards digital wallets and a cashless society. . The surge in cross-border payments, driven by globalisation and e-commerce, propels European businesses into international focus. By committing to innovation, Europe hopes to become a payments tech powerhouse while decreasing its dependence on non-European financial technologies.
XEROF's Response: Digital Wallets and the Path to a Cashless Society
Globally, the rise of mobile wallets is evident; in the United States, 40% of millennials now use digital wallets to pay bills, and this trend is expected to move rapidly to Europe. While 84% of Chinese consumers embrace e-wallets, Europe's journey is nuanced, given its diverse payment preferences across countries.
The challenges lie in Europe's payment diversity. Unlike uniform trends observed in China and Southeast Asia, European countries exhibit distinct payment preferences with varying degrees of technology adoption. France, for instance, leans heavily on card payments, while cash remains prevalent in regions like Bulgaria. In fact, Bulgaria is the most cash-reliant country in Europe, with 74% of all payments being cash-based. Greece and the Czech Republic also heavily rely on cash payments.
Bridging these gaps will require a delicate balance to ensure inclusivity while accommodating local preferences.
XEROF CEO and co-founder Marc Taverner comments:
“As Europe paves the way towards a cashless society, the benefits for businesses are clear—enhanced convenience, security, and increased customer loyalty. However, acknowledging the diversity of demographics across Europe is paramount. The move towards a cashless model should be executed with a consumer-focused mindset, offering choices that cater to everyone, regardless of technology access or digital literacy.”
What are the Benefits of a Cashless Society?
The World Bank reports a 4% reduction in the gender gap in account ownership in the MENA region, attributing it to increased adoption of digital payments. They emphasise the potential to broaden account ownership by digitising various cash transactions, including those in agriculture and private sector wages. The World Economic Forum echoes this, stating that a move towards a cashless society can close the financial inclusion gap.
The UAE is a prime example, where mandatory mobile banking (via WPS) has integrated many expats into the financial system, solidifying its leadership in financial inclusion within the MENA region.
Furthermore, a cashless society benefits all demographics by ensuring no one is left behind due to a lack of technology or digital literacy.
Cross-Border Payments: A Global Necessity
In 2024, cross-border payments will take centre stage as businesses embrace international opportunities fuelled by e-commerce and globalisation. Juniper Research predicts that a third of all e-commerce spending will be global by 2028, surpassing $3 trillion. With its high demand for goods in regions like China and Southeast Asia, Europe is well-positioned to capitalise on this trend.
Businesses must adapt to consumer expectations for fast, convenient, and familiar payment methods in cross-border transactions. Sufficient innovation in this domain is essential to fulfil these requirements, guaranteeing that European retailers can contend on a worldwide scale.
Innovation and Change: Europe's Quest for Tech Supremacy
Europe seeks to diminish its reliance on non-European financial technologies, aspiring to become a tech superpower in payments. Initiatives like the European Payments Initiative (EPI) underscore this commitment, driving the adoption of digital wallets and paving the way for a more integrated European payments ecosystem.
Adapting to Market Demands: The Imperative for Businesses
In order to remain competitive, businesses must swiftly adapt to these transformative trends; this involves embracing new payment technologies, understanding diverse consumer preferences, and preparing for a more integrated European and global payment system. For businesses, being able to handle these changes will soon be essential.
Swiss Businesses and Financial Institutions: Navigating the Shift
Mobile payments are on the rise in Switzerland, with increasing numbers of people opting for the convenience of using smartphones for everyday transactions. Popular platforms like Apple Pay, Google Pay, Samsung Pay, and banking apps facilitate this shift, allowing users to leave their wallets behind. Transactions are swift and contactless, utilising Near Field Communication (NFC) technology. Most Swiss point-of-sale (POS) terminals already support NFC, streamlining the adoption of mobile payment systems.
Swiss businesses and financial institutions play an important role as Europe undergoes this payment evolution. Renowned for innovation and security, Switzerland is well-positioned to contribute to the changing financial system. Switzerland's importance in this space is further highlighted by cross-border financial transactions, particularly in light of the increasing demand for European goods in key markets.
2024: A Pivotal Year for Payments Evolution in Europe
The year 2024 will be significant for the European payments market. Digital wallets, cross-border payments, and innovation are coming together to create a dynamic future that calls on stakeholders and businesses to embrace change and pave the way for an inclusive, tech-driven financial era.
To learn more about digital wallets and payments, contact us to arrange a meeting.
XEROF is a Swiss-licensed Crypto Gateway that offers exchange services for customers who possess crypto wallets and want to use them as fiat currency to purchase real estate properties and luxury goods.Learn more about XEROF