PSD2 ‘will drive down online card volumes’
Written by Anthony Strzalek
The introduction of PSD2 and Instant Payments will drive a 37 per cent decline in online card volumes by 2027 – that’s according to new study from Ovum.
The research ‘Instant Payments and the post-PSD2 landscape’, commissioned by Icon Solutions, provides insights into how PSD2 will be the catalyst for both the decline in card transactions and the uptake in direct and frictionless payment methods such as Instant Payments in Europe. It also shows how Instant Payments under PSD2 will change the way consumers pay for goods and services.
The study predicts that e-commerce card usage will stagnate at current levels of around €260 billion annually and by 2025, boosted by increased consumer convenience and the lower charges that PSD2 facilitates, Instant Payments will overtake cards.
It also forecasts that retail Instant Payments in Europe will hit €725 billion in transactions by the end of 2027 and single card payments set to decline from 40 per cent to 11 per cent market share by 2027.
Kieran Hines, head of industries at Ovum, said: “PSD2 and other open banking initiatives are a golden opportunity for retail banks to re-imagine their products and services, and ensure they are fit for purpose in tomorrow’s digital ecosystem.
“In particular, those banks that combine early adoption of Instant Payments infrastructure with a proactive approach to PSD2 compliance and a focus on the payment needs of both merchants and consumers will be the ones that enjoy the most rapid growth over the coming years”.