BNPL in Europe has crossed an important milestone. What was once seen as an alternative payment option mainly used by younger digital shoppers has now become part of mainstream consumer behavior. Recent market data shows that 50% of European consumers now use Buy Now, Pay Later services or installment payment options, confirming that BNPL has evolved from a niche fintech product into a standard part of the e-commerce checkout experience.

For merchants, marketplaces, retailers, and payment providers, this is more than a passing trend. It represents a structural shift in how European consumers prefer to pay online.

Why BNPL in Europe Is Becoming Essential

The latest data indicates that half of consumers across surveyed European markets actively use BNPL. Many of those users choose it several times per year, showing that usage is now habitual rather than occasional.

This matters because payment methods directly impact conversion rates. If customers reach checkout and do not find their preferred payment option, they are more likely to abandon their cart. In the past, cards, bank transfers, and digital wallets dominated payment preferences. Today, BNPL in Europe increasingly stands alongside them as an expected feature.

For many online retailers, BNPL is no longer an optional add-on. It is becoming essential checkout infrastructure.

Leading Markets for BNPL in Europe

BNPL adoption is not identical across Europe. Usage levels vary significantly by country, influenced by financial culture, regulation, and consumer confidence.

Countries With the Highest BNPL Usage

Recent figures show:

• France leads with 55% usage
• Germany follows with 49%
• Austria reaches 43%
• Italy stands at 41%
• Switzerland remains lower at around 25%

These differences highlight an important reality: Europe is not a single payments market. Consumer trust, attitudes toward credit, and local payment habits still shape adoption levels.

Why Local Payment Preferences Matter

For cross-border merchants, this means checkout localization remains essential. A BNPL strategy that performs well in France may not generate the same results in Switzerland or other markets.

Why Consumers Are Choosing BNPL in Europe

The popularity of BNPL in Europe is not only about access to credit. In many cases, it is about convenience, budgeting, and financial flexibility.

Budgeting and Payment Flexibility

Many consumers choose installment payments because they can spread purchases more easily across monthly budgets. Others value the convenience of splitting payments without relying on traditional revolving credit products.

Cost-of-Living Pressure Across Europe

This is especially relevant during a period of ongoing cost-of-living pressure across Europe. Consumers remain price-sensitive and increasingly focused on managing cash flow. Even shoppers who could pay immediately may still prefer flexible payment terms.

That change in behavior helps explain why BNPL in Europe has expanded beyond fashion into categories such as electronics, home goods, travel, healthcare, and professional services.

Why Merchants Are Embracing BNPL in Europe

The growth of BNPL is not driven by consumers alone. Merchants increasingly see it as a tool to improve performance and revenue.

Business Benefits of BNPL

BNPL can help retailers achieve:

• Higher conversion rates
• Larger average order values
• More completed purchases on higher-priced items
• Improved customer acquisition
• Greater repeat purchase potential

Higher Basket Values and Better Conversion

For merchants selling products with medium or high basket values, the psychological impact can be powerful. A €300 purchase presented as three smaller payments often feels more manageable than one upfront charge.

As customer acquisition costs continue to rise across digital channels, checkout optimization has become more valuable. BNPL directly supports that strategy.

BNPL in Europe and the Rise of Embedded Finance

BNPL in Europe is also part of a broader movement toward embedded finance.

Consumers increasingly expect financial services to appear inside the digital experiences they already use rather than through separate banking channels. This includes lending, insurance, wallets, and instant financing integrated directly into apps and checkout flows.

Seamless Checkout Experiences

BNPL has become one of the clearest examples of this transformation. Instead of applying for credit elsewhere, financing decisions can happen in seconds within the purchase journey itself.

This seamless experience is one of the main reasons BNPL adoption has accelerated so quickly.

Regulation and the Future of BNPL in Europe

As BNPL becomes mainstream, regulators are paying closer attention.

Across Europe, updated consumer credit rules are expected to bring stronger oversight around affordability checks, transparency, disclosures, and responsible lending. This reflects the fact that BNPL is no longer a fringe payment method but a significant part of consumer finance.

Opportunities Created by Regulation

For the industry, this creates both challenges and opportunities.

Higher compliance requirements may increase operational costs for providers and merchants. However, regulation can also strengthen consumer trust, curb poor practices, and help the sector mature.

Over time, stronger standards may support long-term growth for BNPL in Europe rather than slow it.

Risks Retailers Should Consider

Despite its rapid growth, BNPL also comes with challenges that retailers should monitor carefully.

Main Risks of BNPL Adoption

Key risks include:

• Higher return rates from impulse purchases
• Customer overextension and missed payments
• Provider fees affecting margins
• Fraud risks
• Country-specific regulatory obligations
• Overdependence on one BNPL provider

The most successful retailers will treat BNPL as one part of a broader payments strategy rather than a standalone solution.

What BNPL in Europe Means for E-commerce

The mainstream rise of BNPL in Europe sends a clear message: payment flexibility is now part of the customer experience.

Just as fast delivery, mobile optimization, and simple returns became standard expectations, installment payments are moving into the same category. Consumers increasingly judge brands not only by product and price, but also by how easy and comfortable the buying process feels.

For merchants operating in Europe, the key question is no longer whether to offer BNPL. It is about how to implement it effectively across markets, customer segments, and product categories.

The Bigger Picture for BNPL in Europe

The growth of BNPL in Europe is about more than deferred payments. It reflects how digital commerce itself is changing.

How E-commerce Is Evolving

Modern e-commerce is becoming:

• More flexible
• More personalized
• More embedded
• More localized
• More experience-driven

With half of European consumers already using BNPL, the market has clearly moved beyond experimentation.

The next phase of BNPL in Europe will not be defined by adoption alone, but by how well businesses execute their strategy.

The post BNPL in Europe Reaches Mainstream Adoption Across the Market appeared first on Cross-Border Magazine.

The Netherlands is a digitally advanced e-commerce market, with online retail sales exceeding US$43 billion in 2023, expected to grow to around US$63 billion by 2027. Nearly 40 % of purchases are made via mobile devices, highlighting consumers’ preference for fast and trusted digital payment options.

Today, we want to take a deep look at the Netherlands' current e-commerce payment solutions landscape.

Market Overview and Consumer Preferences

iDEAL Dominance in Dutch Payments

iDEAL, the Dutch bank-transfer-based payment system, processes approximately 60–70 % of all online transactions in the Netherlands. It rose from 69% in Q3 2022 to 73% in Q3 2023, confirming its position as the undisputed market leader in e-commerce payments.

Use of Cards and Digital Wallets

Credit and debit cards are less frequently used by Dutch consumers (approximately 14% of transactions), although they remain essential for international shoppers and higher-value purchases. Digital wallets, such as PayPal, Apple Pay, and Google Pay, account for around 11% of transactions, favored by younger and mobile-first shoppers.

Emergence of BNPL and Open Banking

Buy Now, Pay Later (BNPL) is gaining traction in the Netherlands. The market is expected to reach approximately US $10.3 billion in 2025, growing at a 14 % annual rate, with providers like Klarna and Riverty expanding their partnerships with local retailers. Meanwhile, open banking and real-time account-to-account (A2A) payments are rising due to faster settlement and reduced reliance on cards.

Leading E‑Commerce Payment Methods in 2025

iDEAL (Bank‑Based Payments)

iDEAL remains the cornerstone of Dutch online checkout, accounting for over 70% of e-commerce transactions. Shoppers authenticate via their own bank’s secure environment, with prefilled payment information and instant confirmation. The integration of iDEAL is crucial for conversions in Dutch webshops.

Credit & Debit Cards

Used for approximately 14 % of transactions, cards (Visa, Mastercard, Maestro, V Pay) are primarily favored by cross-border customers, higher-basket shoppers, and B2B merchants. For domestic Dutch shoppers, iDEAL remains the preferred alternative.

International Wallets (PayPal, Apple Pay, Google Pay)

These digital wallets account for around 11 % usage and help merchants attract international consumers and younger shoppers. They offer speedy checkout and minimal friction, although conversion rates remain highest with local payment methods.

BNPL (Buy Now, Pay Later)

BNPL adoption is on the rise, with consumers drawn to the flexibility and deferred payments offered. Major providers like Klarna and Riverty are expanding in the Netherlands, particularly among shoppers of fashion and electronics.

Open Banking‑Driven Real‑Time Payments

Real-time A2A payments, enabled by open banking frameworks, are emerging as the preferred method for fast, secure, and cost-effective e-commerce transactions—bypassing cards and reducing fees.

European Payments Initiative: Wero Transition

Wero and the Future of Dutch Payments

The European Payments Initiative (EPI) acquired iDEAL in October 2023 and is preparing to transform it into Wero, a pan‑European digital wallet system. Wero is set to gradually replace iDEAL and expand functionality to online shopping, mobile commerce, QR-based checkout, BNPL, loyalty integration, and European data sovereignty features. Full rollout in the Netherlands is expected between 2025 and 2026, following pilot stages in other markets.

Strategic Considerations for Dutch E‑Commerce Merchants

Prioritizing Local Payment Experience

Dutch consumers overwhelmingly prefer local bank-based payments. Offering iDEAL should be non-negotiable. Only after iDEAL should merchants layer in cards, wallets, or BNPL as secondary options.

Mobile Optimization and Checkout Flow

With nearly 40 % of purchases via mobile, checkout experiences must be streamlined, mobile-first, and support bank-based authentication methods like iDEAL. Digital wallets and BNPL are essential for enhancing speed and conversion on mobile devices.

Preparing for Wero and EU Integration

Merchants should stay informed about the Wero rollout, as it will eventually subsume iDEAL. Preparing integration pathways and ensuring compliance with evolving EU payment regulations (PSD2/3 and Strong Customer Authentication) will keep merchants competitive and future-ready.

Summary Table: Netherlands E‑Commerce Payment Methods 2025

In the Netherlands, iDEAL remains indispensable, representing the largest share of e-commerce payments. Cards and international wallets offer supplementary reach, while BNPL and real-time open banking provide modern flexibility. The upcoming Wero platform represents the next-generation EU-compatible payment framework.

Merchants seeking success in the Dutch market should prioritize iDEAL support, optimize for mobile and local preferences, and prepare for Wero-based payment evolution within the coming years.

The post E‑Commerce Payment Landscape in the Netherlands 2025 appeared first on Cross-Border Magazine.

More than 50 years ago, BBVA introduced the first bank card in Spain, revolutionizing how people paid for goods and services. This milestone marked the beginning of a transformation that would eventually make card payments the most common form of transaction in daily life. But the payments landscape is shifting again, and instant payment solutions are leading the charge.

The Rise of Card Payments: A Legacy of Innovation

In the early days, payment cards were a novelty—an alternative to cash promoted by banks through growing networks of ATMs, merchant agreements, and digital platforms. Over time, cards symbolized convenience, security, and global reach, becoming integral to modern commerce.

Yet the same banks that introduced card technology are now driving a new evolution in payments—one that favors real-time, low-cost digital transfers over traditional card-based systems.

Instant Transfers: The New Standard in European Payments

What Are Instant Payment Solutions?

Instant payments are digital transactions that move money between bank accounts within seconds, 24/7. Unlike cards, these solutions eliminate intermediaries, offering direct, secure, and cost-effective alternatives that align with the European Union's goals for digital sovereignty.

Bizum: Spain’s Leading Example

In Spain, Bizum has become a household name. Backed by a consortium of Spanish banks, Bizum has:

• 28+ million users
  
• 3.4 billion transactions
  
• 80,000+ participating merchants
  

Initially launched as a peer-to-peer (P2P) transfer service, Bizum now supports online purchases, in-store QR code payments, NGO donations, and identity verification. With plans to incorporate NFC technology, Bizum is poised to cover the full spectrum of digital payments.

Beyond Spain: Interoperability Across Europe

Spain is not alone. Italy’s Bancomat Pay and Portugal’s MB Way have followed similar paths. Recently, these three services signed an interoperability agreement allowing users to make instant payments across borders with a mobile phone—no foreign platforms are needed.

The Push for European Payment Autonomy

Why Interoperability Matters

Although each domestic payment solution was designed for local needs, its long-term success depends on pan-European compatibility. A Bizum user should be able to pay a merchant in Italy using Bancomat Pay, and vice versa. This vision is driving technological and regulatory efforts at the European level.

Support from European Institutions

The European Commission and the European Central Bank (ECB) have strongly advocated for homegrown payment solutions as an alternative to international card networks. Their economic and strategic motivation is ensuring Europe’s control over its financial infrastructure and monetary policy.

Initiatives such as PSD3 (the new Payment Services Directive) and SEPA Instant Credit Transfer (SCT Inst), which enables real-time euro transfers across the eurozone, are laying the groundwork for this interoperable payment ecosystem.

The Digital Euro: A Public Alternative for the Digital Age

The upcoming digital euro represents the next significant shift. Currently in development by the ECB, this central bank digital currency (CBDC) aims to serve as a digital complement to cash, ensuring privacy, accessibility, and financial autonomy in an increasingly cashless world.

Role of Instant Payment Platforms

Platforms like Bizum are well-positioned to serve as distribution channels for the digital euro. They already:

• Operate under European regulations
  
• Offer real-time bank-authenticated payments
  
• Have high levels of user trust
  
• Provide proven technical infrastructure
  

This makes them ideal for integrating and distributing the digital euro in a secure, scalable, and inclusive way.

A New Payment Paradigm: Mobile, Fast, and Merchant-Friendly

Today’s consumers and merchants demand more than just convenience. They expect mobile-friendly, private, and efficient payment systems. Instant transfers outperform traditional cards in many ways:

• Lower and more transparent costs
  
• Fewer intermediaries
  
• Faster settlement
  
• Bank-to-bank relationships
  

This benefits merchants, who gain more predictable fees, and consumers, who enjoy seamless, real-time transactions.

The Road Ahead: Toward a Unified, Sovereign European Payments System

The journey that began with BBVA’s first card is coming full circle. Once again, banks are leading innovation, this time with digital tools designed for a connected, sovereign, and user-centric Europe.

National solutions like Bizum, Bancomat Pay, and MB Way are not isolated successes—they are the foundation of a new interoperable ecosystem. With support from European institutions, integration with the digital euro, and strong merchant and user adoption, these platforms are shaping the future of payments in Europe.

Will Instant Transfers Replace Cards?

The final decision doesn’t lie with regulators or banks—it lies with users and merchants. As they gravitate toward instant, secure, and cost-effective alternatives, the role of cards may gradually diminish. What’s clear is that instant payment solutions, once just a supplement, are becoming central to Europe’s digital financial future.

The post From Cards to Instant Payments: The Future of European Transactions appeared first on Cross-Border Magazine.

Buy Now, Pay Later (BNPL) services have revolutionized the European e-commerce sector, offering consumers flexible payment options and driving increased sales for merchants. As of 2025, BNPL has become a mainstream financial tool, particularly among younger demographics seeking alternatives to traditional credit.

Market Overview: BNPL's Explosive Growth

The European BNPL market has experienced significant growth:

• Market Size: In 2024, BNPL payments in Europe reached $167 billion, marking a 15.2% year-over-year increase. Projections estimate this figure will rise to $191.3 billion in 2025.
  
• Growth Rate: The BNPL sector is expected to maintain a Compound Annual Growth Rate (CAGR) of 10.1% from 2024 to 2029, indicating sustained expansion.
  
• Consumer Adoption: Approximately 68% of European consumers have utilized BNPL services, with 40% using them frequently.
  

Leading BNPL Providers in Europe

Several key players dominate the European BNPL landscape:

• Klarna: Headquartered in Sweden, Klarna is a leading BNPL provider with a presence in 26 countries and over 93 million users. The company offers a range of payment solutions, including interest-free installments and direct payments.
  
• Afterpay (Riverty): In Europe, Afterpay operates under Riverty. It provides BNPL services across multiple European markets, focusing on seamless integration with online retailers.
  
• PayPal Pay Later: Leveraging its extensive user base, PayPal offers BNPL options that are widely accepted by merchants, enhancing consumer flexibility at checkout.
  
• Scalapay: An Italian fintech company, Scalapay specializes in BNPL services for fashion and lifestyle products and partners with numerous European retailers.
  
• Alma: Based in France, Alma offers customizable payment plans and BNPL solutions for small and medium-sized businesses.

Main Buy Now, Pay Later (BNPL) providers operating in Europe:

Notes:

• Klarna processed $105 billion in Gross Merchandise Volume (GMV) in 2024, with 93 million active users and partnerships with 675,000 merchants .(research.contrary.com)
• Afterpay handled $27.3 billion in global payments in 2023, serving 24 million users worldwide. It operates under the name "Clearpay" in some European markets .(en.wikipedia.org)
• PayPal Pay Later has a significant user base in Europe, with 137.7 million users in Germany and 56.2 million in the UK as of 2024 .(oberlo.com)
• Scalapay achieved approximately €1 billion in annual financing volume across Southern Europe, with over 5 million users .(blog.scalapay.com)
• Alma reported over €1 billion in annual transaction volume and is a leading BNPL provider in France, expanding its presence across Europe .(fintechnews.ch)

Product Categories Popular with BNPL

BNPL services are predominantly used for the following product categories:

• Fashion and Apparel: Clothing and accessories are the most common purchases made using BNPL, appealing to consumers seeking to manage budgets without delaying gratification.
  
• Electronics: High-ticket items like smartphones, laptops, and gaming consoles are frequently financed through BNPL options.
  
• Home Goods and Furniture: Consumers utilize BNPL to spread the cost of home improvements and furnishings over manageable installments.
  
• Travel and Experiences: An emerging trend shows consumers using BNPL for booking travel and leisure activities, indicating diversification in BNPL usage.
  

Regulatory Landscape: Ensuring Consumer Protection

The rapid expansion of BNPL services has prompted regulatory scrutiny to safeguard consumers:

• European Union Initiatives: The EU is set to implement regulations classifying BNPL as consumer credit by 2026, mandating creditworthiness assessments and more precise terms to prevent over-indebtedness.
  
• Germany's Approach: Starting in 2024, Germany requires credit checks for BNPL transactions, even for amounts under €200, to mitigate consumers' financial risks.
  
• United Kingdom Measures: The UK government plans to bring BNPL providers under the Financial Conduct Authority's oversight, enforcing stricter lending standards and transparency.
  

BNPL services have become integral to the European e-commerce ecosystem, offering consumers flexible payment options and driving merchants' sales. As the market grows, regulatory frameworks are evolving to ensure responsible lending practices. Businesses and consumers should stay informed about these changes to navigate the BNPL landscape effectively.

The post Buy Now, Pay Later (BNPL) in European E-Commerce: A 2025 Market Deep Dive appeared first on Cross-Border Magazine.

The European Union (EU) is one of the world's largest digital markets, offering vast opportunities for e-commerce businesses. With over 450 million consumers and high internet penetration, the EU is a prime environment for online retail. However, navigating cross-border e-commerce and online payment solutions in the EU requires understanding regional regulations, consumer behavior, and preferred technologies.

Today, we’ll explore the current state of e-commerce in the EU, the most popular online payment methods, compliance frameworks like PSD2, and the future trends shaping the industry.

The State of E-Commerce in the European Union

Market Size and Growth

The EU’s e-commerce market continues to grow steadily, fueled by rising consumer trust, mobile commerce, and digital infrastructure. As of 2024:

• Total EU e-commerce revenue is estimated at over €800 billion.
  
• Germany, France, and the Netherlands lead the region in B2C online sales.
  
• Cross-border e-commerce accounts for nearly 30% of all EU digital sales.
  

This presents a strong opportunity for businesses to expand across the continent without physical presence in each member state.

Key Benefits of Selling Online in the EU

• Unified Digital Market: The Digital Single Market initiative reduces barriers to cross-border commerce.
  
• Harmonized VAT Rules: The OSS (One-Stop Shop) system simplifies VAT reporting across EU countries.
  
• Multilingual and Multicurrency Support: Technologies and platforms make localizing for each EU market easier.
  

Online Payment Solutions in the EU

Most Popular Payment Methods

EU consumers have diverse payment preferences. Key methods include:

Card Payments and 3D Secure 2

Credit and debit cards remain dominant. However, the revised Payment Services Directive (PSD2) mandates Strong Customer Authentication (SCA), implemented via 3D Secure 2 for safer transactions. Merchants must ensure their gateways are compliant to avoid payment failures.

Alternative Payment Methods (APMs)

To succeed in Europe, merchants should integrate local payment methods like:

• Klarna, AfterPay – Buy now, pay later (BNPL) options.
  
• Sofort – Real-time bank transfers.
  
• SEPA Direct Debit – Recurring and one-time payments via EU banking infrastructure.
  
• Mobile Wallets – Apple Pay, Google Pay, and region-specific apps.
  

PSD2 and SCA: What Merchants Need to Know

What is PSD2?

The Payment Services Directive 2 (PSD2) is an EU regulation that enhances consumer protection and fosters innovation in online payments. Its key provisions include:

• Strong Customer Authentication (SCA) for most electronic payments.
  
• Open Banking APIs that allow third-party access to bank accounts (with consent).
  

Implications for E-Commerce

Merchants must:

• Use SCA-compliant payment gateways.
  
• Offer frictionless authentication flows to reduce cart abandonment.
  
• Stay updated with exemptions (e.g., low-value transactions or trusted beneficiaries).
  

Choosing the Right Payment Provider in the EU

When selecting an online payment service provider (PSP), consider:

• Multi-currency and multi-language support
  
• PSD2/SCA compliance
  
• Integration with EU VAT reporting systems
  
• Chargeback protection and fraud prevention
  
• Support for local and alternative payment methods
  

Top PSPs in Europe (2025)

• Adyen – Unified commerce and local method support.
  
• Stripe – Developer-friendly APIs and broad coverage.
  
• Mollie – Strong presence in Benelux and supports many local methods.
  
• Checkout.com – Scalable solution for enterprise merchants.
  
• PayPal – Ubiquitous and trusted by consumers across the EU.
  

Cross-Border Challenges & Solutions

Key Challenges

• VAT and customs for non-EU sellers post-Brexit.
  
• Logistics and fulfillment across different countries.
  
• Language and localization of content, customer support, and checkout flow.
  

Solutions

• Use the IOSS (Import One-Stop Shop) for smoother VAT handling on low-value imports.
  
• Partner with EU-based fulfillment centers.
  
• Invest in localization—from language to payment preferences.
  

Future Trends in EU E-Commerce and Online Payments

• AI-driven checkout optimization to reduce abandonment.
  
• Voice commerce and smart home shopping integrations.
  
• Sustainability and ethical consumerism driving new business models.
  
• Open Banking-powered payments gaining traction over cards.
  

The European Union offers one of the most dynamic and unified digital markets for online merchants. By understanding regional nuances in e-commerce and online payment solutions, companies can capitalize on cross-border opportunities and deliver seamless customer experiences. Investing in PSD2-compliant solutions, local payment options, and logistics infrastructure is key to thriving in this competitive landscape.

The post E-Commerce and Online Payment Solutions in the EU - 2025 Overview appeared first on Cross-Border Magazine.

On Europe Day, six leading European mobile payment services—Bizum (Spain), BANCOMAT (Italy), Blik (Poland), Blink by BORICA (Bulgaria), MB WAY/SIBS (Portugal), and Vipps MobilePay (Denmark, Finland, and Norway)—have come together to reaffirm their commitment to building a stronger, digitally connected Europe. This collaboration celebrates the 75th anniversary of the Schuman Declaration, a foundational step in the creation of the European Union.

The Schuman Declaration, signed on May 9, 1950, emphasized that European unity would arise from “concrete achievements that create a de facto solidarity.” Today, this principle is taking shape as interoperable, cross-border instant payment solutions, making real-time mobile transfers possible across European countries.

EuroPA: Building a Pan-European Digital Payments Infrastructure

The collaboration is part of EuroPA (European Payments Alliance), an initiative to develop a seamless and sovereign European payment system. EuroPA leverages EU standards, the trust of local payment brands, and private sector collaboration to enhance Europe’s strategic autonomy and technological independence in the digital payments landscape.

Bizum, a Spanish mobile payment platform backed by the national banking sector, is leading this effort. Its CEO, Ángel Nigorra, shared:

“Today, on Europe Day, the best way to congratulate Europeans is to give them the news that they will be able to make instant transfers with their mobile phones across the continent, in the same way they are used to, without changing their daily habits.”

Instant Mobile Transfers Across Borders: A Reality in 2024

The EuroPA initiative already connects over 50 million users and over 180 financial institutions, creating an ever-expanding ecosystem of interoperable instant payments. In 2024 alone, the original trio—Bizum, BANCOMAT, and MB WAY/SIBS—processed over 2 billion transactions, leading the instant payment market in their respective countries.

With the inclusion of Blik, Blink by BORICA, and Vipps MobilePay, the alliance is rapidly expanding its geographic footprint. This progress is a significant step toward enabling cross-border instant payments that are fast, secure, and user-friendly, mirroring the seamless experience users already enjoy domestically.

Toward a Truly Unified European Digital Economy

The goal of the EuroPA initiative is clear: to deliver frictionless payment experiences for European citizens, businesses, and merchants, regardless of borders. Doing so paves the way for a more digital, interoperable, and cooperative Europe.

As Ángel Nigorra highlighted, this is only the beginning:

“We want to welcome more solutions that have also shown interest in interconnection, while encouraging others to join us in creating a sovereign European payment system.”

The post European Mobile Payment Leaders Unite to Celebrate Europe Day with Cross-Border Initiative appeared first on Cross-Border Magazine.

Morgan Stanley-backed payments company Sokin has acquired Norwegian fintech company Settle Group AS (Settle) to enhance its technology capabilities and offers, including its flagship product, Sokin Pay. The purchase comes months after Sokin received $31 million from Morgan Stanley Expansion Capital.

Sokin CEO and founder Vroon Modgill highlighted the acquisition's strategic importance: "The acquisition of Settle is a turning point for Sokin, as it will allow us to unlock new technology capabilities and expand our presence in key markets. It is a fascinating time for us as a company. We anticipate this will be the first in a series of acquisitions following a recent investment that has accelerated our growth. We aim to deliver market-leading value, an unrivaled proposition, and become the trusted partner for businesses on the global stage."

Settle aims to be a global payment solution

Settle, a payments solution launched in 2010, is an app-based platform that enables consumers and businesses to send and receive money instantly, domestically and internationally. Available in all European Union countries, Settle is positioned as an agile and efficient tool for managing transactions.

Through the acquisition, Sokin gains access to Settle's European EMI license. This license will strengthen their market presence and open up new regional growth opportunities.

Founded in 2019, Sokin offers a platform that enables global businesses to transfer, hold, and exchange over 100 currencies through multi-currency IBANs and local currency accounts. It currently operates at a transaction rate of more than $4.5 billion annually, and its representatives say they anticipate further growth. Sokin integrates with companies in a wide range of verticals, from transportation and logistics to Premier League soccer clubs.

The post Sokin bought the Norwegian fintech Settle appeared first on Cross-Border Magazine.

PragmaGO, one of Europe's leading non-bank providers of SME finance in CEE, known for its innovative technological solutions developed by an internal software house (PragmaGO.tech), has started its international expansion from the Romanian market through the acquisition of an 89% shareholding in TELECREDIT IFN SA (operating under the brand name Omnicredit) from investment company Reconstruction Capital II Limited (RC2) and Elisa Rusu, Telecredit’s CEO, for an initial consideration of EUR 5.785 million plus an earn-out of up to EUR 0.445 million. 

The deal is subject to Romanian foreign direct investment authority approval, RC2 shareholder approval, and several other conditions precedent. PragmaGO provides financing to SMEs in the form of factoring and loans, mainly through embedded finance (BNPL and Merchant Cash Advance) - unique services that are directly integrated into the ecosystem of partners (e.g. marketplaces). 

Embedded finance is characterized by scalability and an automated risk management system. For example, Merchant Cash Advance allows an individual merchant's pre-financing limit to be estimated based on—among other things—sales in the partner's environment. Repayment can be made in installments, as a percentage of turnover. The main European competitors in this field are Youlend, Liberis, Billie, iwoca, Mollie, and Wayflyer.

In 2023, PragmaGO's portfolio value exceeded EUR 70 million, and the company had 17,000 active clients (+25% y/y) in Poland. The company has grown by a factor of three in the last three years. At the end of the year's first half, PragmaGO's turnover was PLN 1.15 billion, an increase of 25% year-on-year. Romania, which shows significant growth potential in the SME financing sector, is the first step of PragmaGO's international expansion. Over the next three years, the company plans to enter several markets in Eastern and Western Europe.

Omnicredit provides non-bank financing to SMEs and has been growing dynamically for several years. Specializing in digital factoring, Omnicredit's receivables portfolio amounted to EUR 6.4 million at the end of 2023 (+54% y/y). 

The dynamic growth is followed by profitability - with a turnover of EUR 40 million (+40% y/y). In the first half of this year, Omnicredit has already achieved a turnover of EUR 28.5 million, representing growth of up to 90% compared to last year. Its receivables portfolio has grown to EUR 8.2 million throughout 2024.

Reconstruction Capital II Limited (“RC2”) is a closed-end investment company with two main investments: Policolor S.A., a leading producer of paints and chemicals with manufacturing plants in Romania and Bulgaria, and Mamaia Resort Hotels SRL, a 300-room hotel in Mamaia, Romania’s premium Black Sea resort. Apart from an 85% shareholding in Telecredit S.A., RC2 also owns two other companies.

We see Omnicredit as a strong and trustworthy, experienced strategic partner, and together, we will continue supporting the development of a wider group of Romanian SMEs. The company has a similar target customer profile to ours, focuses on digitalization and automation of its business processes, and has strong operational and credit risk expertise. Together with Omnicredit, we are well positioned to rapidly expand the portfolio and grow our customer base, scale the business

– said Vjačeslav Lypko, Director of International Expansion of PragmaGO.

We will focus heavily on embedded finance, which allows us to achieve economies of scale, including geographical scalability. In digital factoring, we will implement innovative processes that have already been proven to us in the Romanian market. 

- added Jacek Obrocki, Vice President of PragmaGO.

When RC2, as majority shareholder, re-launched Telecredit as a factoring and micro-lending business in early 2019, its shareholder funds amounted to a mere EUR 1.05 million. Since then, Telecredit has been involved in approximately EUR 145 million of financing transactions, providing financial support to hundreds of Romanian entrepreneurs and SMEs. 

Excluding the earn-out component, the sale of Telecredit, if approved by RC2’s shareholders, will represent a 6.2 times return on capital since the factoring business was started and a return of 6.7 times if one includes the full earn-out component. If completed, the sale of Telecredit will represent another successful exit of RC2, and its second successful exit from a financial services business, the first being the sale of the Top. 

Factoring group, a nonperforming loan (NPL) management business, 2017 which returned EUR 19.8 million to RC2 (including dividends received over the course of the investment), or approximately 5.7 times the cost of this investment

- comments Ion Florescu, President of the Board of New Europe Capital Srl, the investment adviser to RC2.

Telecredit has been supporting Romanian SMEs and entrepreneurs since it launched its ‘Omnicredit’ SME financing platform in early 2019, having provided EUR 145 million of financings either in factoring transactions or micro-loans since then. The management team is proud to have grown the business despite a difficult period for Romania and the region, including the Covid-pandemic-induced lockdowns and the war in Ukraine. We look forward to a new chapter in the company’s development once the transaction with PragmaGO is completed, and are confident that our new shareholders have all the resources and know-how to continue Telecredit’s exceptional growth trajectory

- concluds Elisa Rusu, CEO of Telecredit.

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During a keynote presentation at the Global Fintech Fest in Mumbai, Mastercard announced the global launch and first massive test of its new Payment Passkey service, which aims to make online shopping safer and more accessible than ever before. 

The service, which will debut first in India as a pilot with some of the country's largest payment players, including payment aggregators such as Juspay, Razorpay, and PayU, online merchants such as Bigbasket, and leading banks such as Axis Bank, will give millions of consumers more control and peace of mind when shopping online.  

Despite their growing popularity due to their ease of use, one-time passwords (OTPs) are increasingly vulnerable to online scams such as phishing, SIM card swapping, and message interception. In India, fraud cases have increased by almost 300% in the last two years, reports the Reserve Bank of India's Annual Report 2023-2024.

Payment passcodes are entering the scene. These use device-based biometric authentication methods, such as fingerprints or facial scans, but with an entirely new purpose: streamlining online shopping experiences. By replacing traditional passwords and OTPs, the Mastercard Payment Passkey Service makes transactions not only faster but also more secure against fraud and scams. With Payment Passkeys, consumers can say goodbye to the hassle of accidentally forgetting or sharing their passwords or OTPs.  

What is Mastercard Payment Passkey?

The Mastercard Payment Passkey service uses tokenization to protect a consumer's payment and biometric data, ensuring that data is not shared with third parties and is useless to fraudsters and scammers. 

The service is a tipping point for online payment:  

1. Shoppers choose their Mastercard when checking out as a guest or select a card that is already securely stored in a merchant's files.  

2. To confirm payment, users can use the features of their device's biometric authentication mechanism, such as a fingerprint, facial scan, or PIN. 

3. Once authentication is successful, the payment is completed instantly.  

“By introducing the Mastercard Payment Passkey service in India, we are driving secure online payment and our vision of a tokenized economy,” said Jorn Lambert, chief product officer of Mastercard. "We create a more transparent commerce ecosystem through innovative technology that enhances security and convenience. As we continue to lead the way in digital payments, our commitment to a tokenized future is stronger than ever."  

With its rapidly expanding payments ecosystem and advanced tokenization market, India is adopting payment access keys and enhanced biometric authentication in line with the Reserve Bank of India's goal of a more secure and resilient payments system. Payment passcodes provide speed, convenience, and security, and enhance the user's shopping experience. For businesses, it means fewer abandoned carts and less fraud. For consumers, it means faster payments and peace of mind. 

The Mastercard Payment Passkey service is designed for online or remote tokenized transactions, which today help significantly reduce fraud and increase approval rates. Combining tokenization of payment credentials with seamless biometric authentication, Mastercard combines industry standards from EMVCo, the World Wide Web Consortium, and the FIDO Alliance to accelerate and secure the payment experience. 

Following the initial pilot program in India, the company will roll out the Mastercard Payment Passkey service to more consumers and financial institutions worldwide in the coming months.  

“We are excited to partner with Mastercard to pilot their Payment Passkey service as an alternative transaction authentication method and offer our customers a non-OTP based solution for transaction management,” said Sanjeev Moghe, president and head of Cards and Payments at Axis Bank. “This will enable us to offer a more engaging in-app and user experience for customers who want enhanced security and hassle-free payments.”

The post Mastercard launches its new Payment Passkey in India appeared first on Cross-Border Magazine.

The European Commission (EC) informed this Thursday that it considers as good the concessions offered by Apple to open to its rivals the NFC wireless technology to which it limits the possibilities of the contactless payment 'Tap to Pay' of its iPhone phones -which in practice restricted competition in favor of its Apple Pay service-, binding commitments that Apple must comply with for ten years to avoid a millionaire fine from Brussels for abuse of dominant position.

Ultimately, this means that iPhone users will be able to use other payment apps in addition to Apple Pay, thus enabling third-party payment options.

"It's safe and convenient to pay with your phone. It opens up competition in this crucial sector by preventing Apple from excluding other mobile wallets from the iPhone ecosystem. From now on, competitors will be able to effectively compete with Apple Pay for mobile payments with the iPhone in stores. Consumers will, therefore, have a wider range of secure and innovative mobile wallets to choose from," defended Margrethe Vestager, the EU executive vice president in charge of competition.

The case dates back to 2020, when the EC began investigating the technology company's practices, although it was not until May 2022 that it took the step of formally accusing Apple of preventing developers of contactless payment apps from accessing the standard NFC wireless technology in the brand's devices, forcing users to opt for Apple Pay, the only mobile wallet that can access NFC hardware and software in iOS to make in-store payments, as Apple does not make it available to third-party mobile wallet developers.

In its investigation, the Commission made a preliminary finding that Apple had abused its dominant position by refusing to provide NFC input into iOS to its rivals, reserving such access only to Apple Pay. The Commission's preliminary view is that Apple's refusal foreclosed Apple Pay rivals from the market and resulted in less innovation and choice for iPhone mobile wallet users.

Apple must commit to implementing the HCE

In an attempt to address Brussels's concerns, the company headed by Tim Cook has committed to allowing other mobile payment operators to access its NFC system on iOS devices at no additional charge. Apple will also have to give third parties access to the HCE (host card emulation) system, which allows payment credentials to be stored securely.

 It will allow users to set an HCE payment app as the default and use features such as Field Detect (which opens the default payment app), double-click (which opens the default payment app by double-clicking the phone's side or home button), and authentication tools such as Touch ID, Face ID, and the device passcode.

Moreover, Apple should apply objective, transparent, and non-discriminatory criteria to allow third-party operators to access the NFC payment system. Apple must establish a monitoring mechanism and an independent dispute resolution system that allows for review of Apple's decisions restricting access. 

These commitments should apply to all third-party mobile app developers in the EU, also when they temporarily travel outside the EU area.

In addition, after consultation with third parties involved in the market, Apple has made a number of additional commitments, such as extending the possibility to initiate payments with HCE apps on other industry-certified handsets or explicitly recognizing that HCE developers are not prevented from combining the HCE payment feature with other NFC functionalities or use cases. It will also remove the requirement for developers to have a payment service provider ("PSP") license or a binding agreement with a PSP to access NFC input and allow developers to access NFC technology to pre-build payment applications for third parties

Apple will update the HCE architecture to align with evolving industry standards used by Apple Pay and will allow developers to require users to configure their default payment application easily. It must also comply with industry specifications for HCE payment app developers and protect sensitive information obtained during an audit. 

The U.S. company must shorten dispute resolution times and provide guarantees of independence in the oversight procedure. These changes must be in place by July 25.

Suppose Apple does not comply with these commitments. In that case, the Commission may impose a fine of up to 10% of its total turnover, without having to find a breach of EU antitrust rules, or a periodic penalty payment of 5% of its daily turnover for each day of non-compliance.

The post Apple yields to the European Commission and will allow third-party payments appeared first on Cross-Border Magazine.