Ovum, a market research and consulting company, has released a study that shows how PSD2 will drive single card payments down by 37% until 2027.
The research Instant payments and the post-PSD2 landscape, commissioned by Icon Solutions, provides insights into how PSD2 will lead to a decline in card transactions and an increase in frictionless payment methods such as Instant Payments in Europe.
The new European Payment Service Directive will cause ecommerce card usage to stagnate at current levels of around EUR 260 billion annually, instead of hitting the EUR 411 billion mark predicted without PSD2. On the other hand, the directive will boost frictionless payment methods, like Instant Payments and ewallets, which are expected to overtake cards.
As ecommerce card payments decrease by 37%, digital wallets and Instant Payments will become the two dominant payment methods as early as 2024, absorbing an average of 29% of expenditure across Europe.
The shift from ecommerce to digital channels will pressure merchants into adopting an omnichannel approach and to support new payment methods, the study shows.
The research, conducted by Ovum and commissioned by Icon Solutions, covers ten Europe-based markets and uses data from a European payments database, built from several sources including, national banks, national statistics agencies, and payments associations.