How to master payments in Europe and the UK

Learn the latest on regulation, payment preferences, and consumer expectations in Europe for this year.

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Wilco Slabbekoorn
January 29, 2025
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How to master payments in Europe and the UK

Europe’s payments ecosystem is being shaped by rapid advancements in technology, evolving consumer preferences, and regulatory innovation. For businesses aiming to connect with local markets in the region, understanding and navigating this dynamic landscape is essential. 

From the opportunities presented by unified EU and EEA frameworks to the rising popularity of payment methods like digital wallets and instant payments, Europe offers unique advantages for businesses. At the same time, challenges such as local market nuances and updated regulations, like the upcoming PSD3, demand strategic planning and localized approaches. 

As the Head of Commercial in Europe for Checkout.com, I’m responsible for driving regional revenue growth, overseeing commercial strategy, and ensuring we achieve our strategic goals.  

In this article, I explore the key trends shaping payments in Europe and delve into key strategies for success – with valuable insights from a payments expert at Vinted. Whether you’re looking to expand into Europe or already operating in the region, this guide offers the knowledge needed to thrive in its complex yet rich payments landscape. This article forms part of our series of regional guides to enhancing your payments.

Payments landscape in Europe

For many global businesses, connecting with local markets can be a challenge. However, navigating payments in Europe is made easier due to the European Union (EU) and the European Economic Area (EEA). The EU connects different countries around the region under a unified set of laws and regulations, such as The General Data Protection Regulation (GDPR) and the Anti-Money Laundering Directive (AMLD). 

Usually, for a business to use an acquirer in a particular country, they’re required to have a legal entity in that country. However, there are some exceptions – and the EEA is one of them. The EEA allows direct acquiring in all of its member countries, meaning businesses can operate across the region without having a legal entity set up in each country. For example, a payment service provider (PSP) with a French acquiring license, like Checkout.com, can process payments for a German company, who can also sell to Dutch consumers – because they’re all in the EEA. 

Not only does that mean you can centralize your operations and process payments across the whole EEA with just one PSP, it also reduces costs – because partnering with a local acquirer is cheaper than doing cross-border settlements. 

Payments strategy for success in Europe

When entering a new market, you must assess what is important for your target consumers and ensure your technology and go-to-market strategy is ready for launch. What are the best ways to do this? 

Leverage local knowledge

No doubt having a team on the ground can make the process of launching into a new market much smoother. And that’s definitely the case when it comes to choosing the right payment methods. Many companies start strategizing before choosing payment methods by leveraging the local knowledge of their employees on the ground. Sometimes they’ll hire consultants if the market is big enough to warrant it. Both can help to understand the regional trends.

There’s a lot of research to be done, and local experts are the best people to learn from. Applying the same approach in two different markets won’t necessarily garner success in both, so local insights on how to be more targeted in your approach are invaluable. 

Run a test

If you enter the market with one of your flagship products or events, you’ll be able to quickly gauge success (or lack of). You’ll already know exactly how well the payment process should perform and what metrics mean it’s going badly, making it the perfect test for market readiness.

Make sure to test the funnel from end to end and see what’s going right, what’s going wrong, and what needs adjusting. 

You can run AB tests to determine which payment methods will be more appealing to your customers, and which ones have better results. AB tests can be used for many other elements of the payments funnel too. 

With the high cost of implementing new payment methods, experimentation and testing can seem daunting – it’s a lot to invest with no guaranteed reward. But if you think the answers will lead to better customer satisfaction and higher adoption rates, testing is worth it. 

Data reconciliation is incredibly important; integrate data with your database for ease. 

Start small

Some businesses prefer to take the approach of starting small, launching in new European markets with the standard proposition only: credit and debit cards, Apple Pay, and Google Pay. Then, once already settled in the market, they will start to shop around for new payment methods to add to their roster. 

“We wouldn’t blindly turn on a new payment method from day one. We first want to see how the market is performing in general, what the transaction volume is, and what the consumer behavior is like.” Confirms Greta. 

Launching new payment methods requires a lot of effort and investment. Although you can integrate via a payment service provider (PSP) like Checkout.com, which simplifies the process significantly, there is still front-end work to be done on the customer experience side, for example. Hence why many businesses are hesitant to add as many local payment methods as possible without considering strategy. 

Don’t overwhelm customers

It’s important for merchants not to overdo it when it comes to local payment methods. There are always new ones arriving on the market, whether that’s APMs or BNPL providers. Having too many options at checkout will only confuse shoppers. It’s better to consolidate the options with a few key strategic choices. 

Stay ahead of the game

To stay ahead of the curve, you need to consider factors like resources and timelines. When something big comes along, like open banking, you need to adapt quickly. You don’t have two years to figure out how to dedicate the resources if your competitors are already way ahead of you. The sooner you start testing, the sooner you can go full-scale. However, it’s a fine balancing act – you don’t want to launch too soon into a low-priority method just for the sake of being an early adopter. You have to assess if it’s a priority for your specific business. 

Innovate and set trends, but don’t lose sight of what the critical mass of your customers already know and use. 

Data is always the best driver of these decisions, but a little local and industry knowledge goes a long way too. Many businesses will rely on expert knowledge from their PSPs, like Checkout.com, to help them achieve front-runner status. Questions to consider asking are:

  • What experience has a merchant in a similar vertical to us had when launching this new payment method?
  • What are your operations in this new market we’re considering expanding into?

Interestingly, some businesses prefer to stay one step back and let others warm up the payment method in the market before they dip their toes in. This way all the flaws are already worked out and the provider has likely fixed any bugs or issues. 

One-click payments

Is one-click payments a trend in Europe? The answer is certainly yes among businesses that rely heavily on returning customers because it helps foster brand loyalty and customer satisfaction. As we’ve already established, European consumers love convenience in payments. That’s why it makes sense to add it to your regional strategy. 

One-click payments let customers purchase from your business online with just one click—no billing, payment, or shipping details need to be entered. For this to work, customers will need to have saved their card information with your business after a previous purchase, usually by creating an account. 

To offer one-click payments to your customers, you’ll need to find the right payment service provider. At Checkout.com, we’ve partnered with Bolt to make its industry-leading one-click payments solution available to all our customers. Simplify your payment flow, reduce cart abandonment, and boost your conversion rate – safe with the knowledge that we handle all PCI DSS compliance for you. 

How Checkout.com will help you master payments in Europe

I’ve covered some of the top payments trends in Europe right now, and what elements to include in your strategy for success in the region. For tailored guidance, Checkout.com’s team of Payment Success Managers will expertly lead you through how to localize effectively in Europe. 

Our local acquiring licenses in the UK and France mean we’ve got all bases covered in Europe. Our French acquiring license allows us to offer direct acquiring in all of the EEA’s 30 member countries – whether your business has a legal entity in the country or not. As a result, you’ll benefit from reduced currency conversion losses and say goodbye to cross-border charges. 

Our expansive global network of payment methods includes some of Europe’s most popular, from traditional to alternative. Offer your customers the options of Apple Pay, Bizum, Cartes Bancaires, iDEAL, Klarna, MB WAY, PayPal, Przelewy24, SEPA, SeQura, and more. 

Checkout.com also has a range of innovative tools designed to help you achieve local success. Intelligent Acceptance boosts your acceptance rates with local issuers, while Flow lets you easily add and remove payment methods and offer customers their preferred choice based on device, location, currency, or language.

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January 29, 2025 13:30
January 29, 2025 13:30