Europe could be looking at the end of cash for day-to-day transactions as contactless payments via smartphones see mass adoption on the continent, which is considerably more progressed than other global markets.
According to a report from global think tank Fung Global Retail & Technology, some European countries are well on their way to a cashless ecosystem, with retailers, transportation companies and even bank branches no longer accepting cash.
"Despite the developments in digital payment methods, cash is still commonly used in many regions, particularly in Eastern Europe," said Deborah Weinswig, managing director at Fung Global. "But mobile payment adoption in Europe is expected to make great leaps in the coming years."
Asia-Pacific still leads the world in mobile payments, but Europe has seen rapid growth in the broader contactless payments category, which also includes contactless credit and debit card payments. In 2013, just one in 60 face-to-face payments were made using contactless. That has grown to one in five this year, driven by growth in everyday purchases using the technology, and wider acceptance among merchants.
"Consumer sectors that see a high number of low-value transactions channelled through payment terminals, such as transportation and grocery retail, look to offer the greatest opportunities to grow mobile payment usage," said Weinswig. "Because consumers make frequent purchases in these categories, they desire speed and convenience in such transactions.
"These sectors can serve to introduce mobile payments to consumers, who will likely want to use them in other sectors once they are familiar with how they work."
The growth in Western Europe is underpinned by high rates of smartphone penetration and bank account penetration compared to Asia and Africa, with nine of the top 15 ranked digital-ready countries located in Europe.
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