2020 May Be Tough for Europe’s Mobile Payments and Merchant Services Market

December 17, 2019         By: Steven Anderson

Normally when we talk about Europe in a mobile payments context, we’re using terms like “exploding,” “gaining,” and other terms designed to evoke a sense of growth. That’s how it’s been for a while over there, but a new report sent our way from AEVI suggests that that growth may be somewhat curtailed going into 2020.

The AEVI report took a look at trends in merchant services, focusing especially on three of the biggest markets in Europe: Spain, Italy, and France. One of the biggest points the report raised was the ongoing issue of merger and acquisition (M&A) activity. In fact, some of that M&A activity is said to be in response to gains being made from outside Europe’s borders, as companies like iZettle, PayPal and Square make inroads into Europe.

Additionally, the report raises a point that we’ve been making out here for some time now: the way to get ahead increasingly seems to be through improving customer experience, particularly in terms of digital operations. Price wars have their place, but it’s the last thing any reasonable company would want to compete on alone. Only consumers really win a price war.

AEVI’s CEO, Mike Camerling, noted “We can expect acquirers to increase the amount of strategic partnerships and look to acquire smaller, more nimble players to add to their talent pool and refresh their innovative drive. Rather than trying to integrate and connect individually with best-of-breed software developers, acquirers need an open platform that provides the interoperation of services and an app marketplace from which to select the right apps for particular merchant types.”

There’s little to dispute in the report; why AEVI didn’t address Germany much is unclear as it’s the biggest market in Europe. Still, the conclusions drawn by the report likely have sufficient universal validity to apply to nearly any market. 2020 is likely going to be a year full of M&A activity as companies band together to try and cement their market share, and also, a year of payment operations trying desperately to do whatsoever they can to keep customers’ interest.

That’s par for the course in a maturing market, and mobile payments has come a long way since it got started back in the early days of the 2010s.