Western & Central Europe

Of the nineteen countries whose data PPRO draws on for this report, twelve are eurozone members. In recognition of this, much of the focus in this introductory text is on the eurozone. However, we’ve also considered the UK as a whole and examined the situation of non-EU members, such as Britain and Norway.

In 2020, the EU suffered a 6% contraction of its GDP, the eurozone 6.5%. In 2021, the EU and eurozone economies are both forecast to grow by 4.8%. The story in the UK is broadly similar, with a contraction of 9.8% in 2020 followed by predicted growth of 7.2% in 2021.

It’s worth noting that EU and UK figures are not directly comparable. When measuring the contribution of public-sector activities to the GDP, the UK’s Office For National Statistics takes output into account, such as hours spent teaching, surgical operations performed and so on. Other Western European countries measure public-sector activity based on how many employees are being paid.

In the eurozone, inflation in the middle of 2021 was 2.2%, slightly higher than the European Central Bank’s (ECB’s) 2% target. In Denmark, it was 1.7%, in Hungary 5.3%, in Norway 2.8%, in Poland 4.2%, in Sweden 1.3%, in Switzerland 0.7%, and in the UK 2.4%. In most cases, prices are increasing far faster than they were before the pandemic. It remains to be seen whether this is an artefact of the pandemic — a reaction to supply-chain blockages, the extra cost of doing business, and so on — or whether inflation has returned in earnest for the first time in decades.

Even at the height of the pandemic, there were murmurings that the ECB must soon start to wind down its quantitative easing (QE) programme. In fact, the bank announced an extra €500 billion in bond purchases at the end of 2020. Eurozone interest rates remain low at -0.5%. In the UK, the central bank interest rate was 0.1% by the summer of 2021. Like the EU, the UK is also running a QE programme, buying an extra £150 billion worth of bonds in November 2020.

By the middle of 2021, things looked good in West and Central Europe. In the EU, the economy was growing at its fastest pace in decades. There were even hopes of an acceleration of the recovery, thanks to the rapid vaccination programme. Then the Delta variant of the COVID-19 virus hit. Where infection rates had been under control, they started to climb again. As a result, the economic recovery faltered somewhat.

Western & Central Europe
E-commerce % of total retail 17.6
E-commerce completed on a mobile device 43
World
E-commerce % of total retail 20
E-commerce completed on a mobile device 53

E-commerce in Western & Central Europe

The e-commerce market

On the eve of the pandemic, the e-commerce market in Western and Central Europe was worth US$768 billion and was growing at a rate of 12% a year. 43% of all online purchases are completed on a mobile device. And the average online shopper spends US$1,936 with e-commerce merchants every year.

In summer 2020, McKinsey asked a representative sample of European consumers (from countries within and outside the EU, including the UK, Switzerland, and Norway) which of a range of digital services they had used in the last six months, and which they had used for the first time. The services included banking, insurance, e-commerce, public-sector and others. Before the pandemic, 81% had used at least some of these as digital services. After the pandemic, this had risen to 95%. In some markets, the increase was even starker. In Romania, for instance, digital adoption went from 64% to 89%; in Germany from 61% to 89%.

According to Eurostat, 72% of Europeans aged 16 to 74 bought something online during the pandemic. In the UK, the pandemic and lockdown added an estimated £5.3 billion to the value of the e-commerce market. The Swiss e-commerce market grew in volume by 20% in 2020. In Norway, the postal service reported a 150% increase in the volume of parcels it carried during the pandemic. And so on.

As in other parts of the world, e-commerce in Western and Central Europe boomed during lockdown. Lots of new consumers came online for the first time and many people who were already online shopped more with e-commerce merchants than they had done before the pandemic.

  • Card-based payments
  • Cash-based payments
  • Bank Transfer
  • Wallets
  • Other
[{"label":"Card-based payments","value":"45"},{"label":"Cash-based payments","value":"5"},{"label":"Bank Transfer","value":"25"},{"label":"Wallets","value":"23"},{"label":"Other","value":"2"}]

The payment landscape in Western & Central Europe

The local payment culture

Western and Central Europeans pay for 45% of online purchases using a credit or debit card. The next most popular payment method is bank transfer, which consumers use in 25% of online purchases. Europeans use e-wallets in 23% of online transactions, cash in 5% and a range of minor payment methods in the remaining 2% of online purchases. The card market is split between Visa (49%), Mastercard (27%), American Express (1%) and local schemes (23%).

Unsurprisingly, initial data shows a significant rise in the popularity of digital payments during the pandemic. During lockdown, use of cash fell by anywhere from 10% to 50%, depending on the country. Overall use of digital payments in Europe is forecast to grow by 70% between 2020 and 2025.

E-commerce market size ($USD billion)
Western and Central Europe 768
World 4269
E-Commerce spending per capita ($USD)
Western and Central Europe 1936
World 1080

Enabling and limiting factors

Financial inclusion rates in the region are, as you’d expect, high. 94% of the region’s adults have a bank account and 46% have a credit card. Where financial exclusion does exist, it tends to impact already-marginalised groups, such as migrants. As financial services digitise, there is also an increased risk of financial exclusion among the elderly.

Internet penetration in the EU stands at 87%. Almost 80% of the adult population has an internet-enabled smartphone. A recent study estimated that by 2025, 5G coverage in Europe would range from 24% in Norway to 68% in the UK.

In 2020, e-commerce shipment volumes in Europe increased by 149% for internal purchases and 123% for cross-border purchases coming into the continent. In response to these increased volumes, there was a 40% increase in the number of pick-up drop-off (PUDO) points in the EU and the UK during 2020. In general, the region has some of the best-developed postal and logistics networks in the world. In the World Bank Global Logistical Performance Index, eight of the top-10 performing countries are covered by this report.

Conclusion

Like everywhere else in the world, the immediate economic prospects for Western and Central Europeans hinge very much on the performance of their pandemic response. That factored in, the region is highly prosperous, has great logistics, and a well-connected population. Lots of people who weren’t online a year ago are now. And many of those who were online before have changed their shopping habits and brand loyalties. There’s probably never been a better time to get into e-commerce in Western and Central Europe.

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Western & Central Europe

General Information

  • Population 508m
  • Population 15 + 431m
  • Online Population 461m
  • GDP ($US billion) 19,452bn USD
  • GDP per capita ($US) 38,267 USD
  • Card-based payments
  • Cash-based payments
  • Bank transfer
  • Wallets
  • Other
[{"label":"Card-based payments","value":"45"},{"label":"Cash-based payments","value":"5"},{"label":"Bank transfer","value":"25"},{"label":"Wallets","value":"23"},{"label":"Other","value":"2"}]
Banked population
  • Western & Central Europe 94%
  • World 67%
Internet penetration
  • Western & Central Europe 91%
  • World 62%
Credit card penetration
  • Western & Central Europe 46%
  • World 19%
Smartphone penetration
  • Western & Central Europe 75%
  • World 70%

Western & Central Europe

The E-Commerce Market

E-commerce % of total retail
  • Western & Central Europe 17.6%
  • World 20%
E-commerce completed on a mobile device
  • Western & Central Europe 43%
  • World 53%
  • E-commerce market size ($US billion) 768bn USD
  • E-commerce spending per capita ($US) 1,936 USD

Western & Central Europe

European payment methods

Bancontact Type Local payment card Regions Western & Central Europe Market relevance High BitPay Type Wallet Regions Asia Pacific + 5 BLIK Type Wallet Regions Western & Central Europe Market relevance High eps Type Bank transfer Regions Western & Central Europe Market relevance High giropay Type Bank transfer Regions Western & Central Europe Market relevance High Hyperwallet Type Bank transfer, Gift card, Prepaid voucher Regions Asia Pacific + 5 Market relevance High iDEAL Type Bank transfer Regions Western & Central Europe Market relevance High MULTIBANCO Type Bank transfer, Cash Regions Western & Central Europe Market relevance High MyBank Type Bank transfer Regions Western & Central Europe Market relevance High Pay by Bank app Type Bank transfer Regions Western & Central Europe Payconiq Type Wallet Regions Western & Central Europe PayPal Type Wallet Regions Asia Pacific + 5 Market relevance High PaysafeCard Type Prepaid voucher Regions Asia Pacific + 5 Market relevance High PaysafeCash Type Cash Regions Eastern Europe & The Commonwealth of Independent States + 2 Paysera Wallet Type Wallet Regions Asia Pacific + 5 Market relevance High PayU Type Bank transfer Regions Asia Pacific + 4 Market relevance High PostFinance Type Bank transfer Regions Western & Central Europe Market relevance High Przelewy24 (P24) Type Bank transfer Regions Western & Central Europe Market relevance High Satispay Type Wallet Regions Western & Central Europe Market relevance Medium SEPA Direct Debit Type Bank transfer Regions Eastern Europe & The Commonwealth of Independent States + 1 Market relevance High Skrill Type Wallet Regions Asia Pacific + 5 Market relevance High Trustly Type Bank transfer Regions Eastern Europe & The Commonwealth of Independent States + 2 Market relevance High TrustPay Type Bank transfer Regions Eastern Europe & The Commonwealth of Independent States + 1 Afterpay Type Instalments Regions Asia Pacific, North America, Western & Central Europe Market relevance High Allied Wallet Type Wallet Regions Asia Pacific + 5 Market relevance High Apple Pay Type Wallet Regions Asia Pacific + 5 Market relevance High Amazon Pay Type Wallet Regions Asia Pacific + 3 Market relevance High BANCOMAT Pay Type Wallet Regions Western & Central Europe Market relevance High BankAxept Type Local payment card Regions Western & Central Europe Market relevance High Boku Type Carrier billing Regions Asia Pacific + 5 Market relevance High Carte Bleue Type Local payment card Regions Western & Central Europe Market relevance high Cartes Bancaires Type Local payment card Regions Western & Central Europe Market relevance High Cash App Type Wallet Regions North America, Western & Central Europe Market relevance High Dankort Type Local payment card Regions Western & Central Europe Market relevance High DaoPay Type Carrier billing Regions Asia Pacific + 5 Market relevance High E-Carte Bleue Type Virtual card Regions Western & Central Europe Market relevance High eDankort Type Bank transfer Regions Western & Central Europe Market relevance High eRaty Type Buy Now, Pay Later, Instalments Regions Western & Central Europe Market relevance High Google Pay Type Wallet Regions Asia Pacific + 5 Market relevance High Klarna Type Bank transfer, Buy Now, Pay Later, Instalments Regions Asia Pacific, North America, Western & Central Europe Market relevance High Masterpass Type Wallet Regions Asia Pacific + 5 Market relevance High Mobiamo Type Carrier billing Regions Asia Pacific + 5 Market relevance High MobilePay Type Wallet Regions Eastern Europe & The Commonwealth of Independent States + 1 Market relevance High Mooney Type Prepaid card Regions Western & Central Europe Market relevance High Nordea e-betalning Type Bank transfer Regions Western & Central Europe Market relevance High Orange Money Type Wallet Regions Eastern Europe & The Commonwealth of Independent States + 2 Market relevance High P24 Now Type Buy Now, Pay Later, Instalments Regions Western & Central Europe Market relevance High Paylib Type Wallet Regions Western & Central Europe Market relevance High PayPo Type Buy Now, Pay Later, Instalments Regions Western & Central Europe Market relevance High PayPoint Type Cash Regions Eastern Europe & The Commonwealth of Independent States + 1 Market relevance High Razer Gold Type Wallet Regions Asia Pacific + 5 Market relevance High Samsung Pay Type Wallet Regions Asia Pacific + 5 Market relevance High SEPA Credit Transfer Type Bank transfer Regions Eastern Europe & The Commonwealth of Independent States + 1 Market relevance High Siirto Type Bank transfer Regions Western & Central Europe Market relevance High SWIFT Type Bank transfer Regions Asia Pacific + 5 Market relevance High Swish Type Wallet Regions Western & Central Europe Market relevance High VIPPS Type Wallet Regions Western & Central Europe Market relevance High WebMoney Type Wallet Regions Asia Pacific + 3 Market relevance High UK Direct Debit Type Bank transfer Regions Western & Central Europe Market relevance High YooMoney Type Wallet Regions Asia Pacific + 2 Market relevance High AfterPay Type Buy Now, Pay Later Regions Western & Central Europe Market relevance Medium AstroPay Type Prepaid voucher Regions Asia Pacific, Middle East & Africa, South & Central America + 1 Market relevance Medium Barzahlen Type Cash Regions Western & Central Europe Market relevance Medium BlueCode Type Wallet Regions Western & Central Europe Market relevance Medium CaixaBankWallet Type Virtual card Regions Western & Central Europe Market relevance Medium Bizum Type Wallet Regions Western & Central Europe Market relevance High GoPay Type Wallet Regions Eastern Europe & The Commonwealth of Independent States + 1 Market relevance Medium KIR Paybynet Type Bank transfer Regions Western & Central Europe Market relevance Medium Lydia Type Wallet Regions Western & Central Europe Market relevance Medium MyOne Type Local payment card Regions Western & Central Europe Market relevance Medium MySi di CartaSi Type Wallet Regions Western & Central Europe Market relevance Medium paydirekt Type Bank transfer Regions Western & Central Europe Market relevance Medium PostePay Type Wallet Regions Western & Central Europe Market relevance Medium PowerPay Type Buy Now, Pay Later Regions Western & Central Europe Market relevance Medium Secure Remote Commerce (SRC) Type Wallet Regions Asia Pacific + 5 Market relevance Medium SEPA Instant Credit Transfers (SCT Inst) Type Bank transfer Regions Eastern Europe & The Commonwealth of Independent States + 1 Market relevance Medium SuperCASH Type Cash Regions Western & Central Europe Market relevance Medium TWINT Type Wallet Regions Western & Central Europe Market relevance Medium Wallet One Type Wallet Regions Asia Pacific + 4 Market relevance Medium Zip Type Instalments Regions Asia Pacific, Western & Central Europe Market relevance Medium Aktia Wallet Type Wallet Regions Western & Central Europe Ålandsbanken Type Bank transfer Regions Western & Central Europe Aurore Type Local payment card Regions Western & Central Europe Banco Pichincha Type Bank transfer Regions South & Central America, Western & Central Europe Banco Sabadell Type Bank transfer Regions Western & Central Europe BBVA Type Bank transfer Regions Middle East & Africa, North America, South & Central America + 1 BBVA Espana Type Bank transfer Regions Western & Central Europe Billink Type Buy Now, Pay Later Regions Western & Central Europe Boloro Type Wallet Regions Asia Pacific + 5 CASHWAY Type Cash Regions Western & Central Europe Clearpay Type Instalments Regions Western & Central Europe Market relevance High Danske Bank Finland Type Bank transfer Regions Western & Central Europe G2A Pay Type Wallet Regions Asia Pacific + 5 Handelsbanken Type Bank transfer Regions Western & Central Europe IberCaja Pay Type Bank transfer Regions Western & Central Europe ING Home’Pay Type Bank transfer Regions Western & Central Europe InterCard Type Prepaid voucher Regions Western & Central Europe KBC Touch Type Bank transfer Regions Western & Central Europe LaterPay Type Buy Now, Pay Later Regions Western & Central Europe MB WAY Type Wallet Regions Western & Central Europe MEO Wallet Type Wallet Regions Western & Central Europe Microsoft Pay Type Wallet Regions North America, Western & Central Europe Mukuru Payments Type Money Transfer Regions Western & Central Europe Market relevance Medium NETELLER Type Wallet Regions Asia Pacific + 5 Nexi Pay Type Wallet Regions Western & Central Europe Oma Säästöpankki Type Bank transfer Regions Western & Central Europe OP-mobiili Type Bank transfer Regions Western & Central Europe Oxygen Wallet Type Cryptocurrency Wallet Regions Western & Central Europe Market relevance Medium paybox Type Wallet Regions Western & Central Europe Paylevo Type Buy Now, Pay Later Regions Western & Central Europe Paymorrow Type Buy Now, Pay Later Regions Western & Central Europe PayPal Credit Type Buy Now, Pay Later Regions North America, Western & Central Europe Payshop Type Cash, Prepaid card Regions Western & Central Europe POP Pankki Type Bank transfer Regions Western & Central Europe Simple Type Wallet Regions Western & Central Europe YetiPay Type Wallet Regions Western & Central Europe Siru Mobile Type Carrier billing Regions Western & Central Europe Sporopay Type Bank transfer Regions Western & Central Europe Teleingreso Type Bank transfer, Cash Regions Western & Central Europe Twisto Type Wallet Regions Eastern Europe & The Commonwealth of Independent States + 1 Waricash Type Cash Regions Western & Central Europe Western Union QuickPay Type Cash Regions Western & Central Europe Market relevance High VIAMO Type Wallet Regions Western & Central Europe Zimpler Type Wallet Regions Western & Central Europe Sofort (Klarna) Type Bank transfer Regions Asia Pacific, Western & Central Europe Market relevance High Splitit Type Instalments Regions Asia Pacific + 5