Key Ingredients with Abhishek – Europe

With the EU on the cusp of major market change as Brexit starts to take shape, EP’s CTO visited Germany, Spain and Luxembourg to see how it’s impacting consumer sentiment.


You visited three very different countries under the EU umbrella, what was your key payments observation?
Europe has an incredibly diverse payments market and payment preferences are very much a cultural thing. Credit cards and debit cards, Visa and Mastercard remain the most prevalent payment methods around the world and on the whole Europe is no exception. But, there are some key differences around how consumers respond to paying now versus paying later. In Spain for example, consumers are very comfortable using credit cards. In contrast, German consumers tend to spend the money that they have and rely less on credit. For that reason it is crucial for merchants to understand not only the EU, but more specifically the country they are looking to expand into.

Let’s focus on Germany – what trends did you see?
Germany is a good example of a country that prefers alternative payment methods to Visa and Mastercard. Culturally, Germans have a long-standing fear of debt and they prefer to pay afterwards when they order something. Only 20% of the country prefers to use credit cards, with more than 60% of consumers opting to alternative methods like direct debit, Sofort, ELV and Giropay.

How does Spain differ?
Spain is much more relaxed when it comes to using credit. Visa and Mastercard are very dominant – over 90% of the population use this payment method for their online purchases. Consumers are also open to alternatives and Paypal is one such option that is well substantiated. Cash on delivery of goods also remains very popular. It’s a market that is very ripe for foreign merchants with cross-border purchasing through e-commerce sites already accounting for over half of the country’s online transactions. Spain has one of the fastest-growing mobile e-commerce markets in Europe, so it’s crucial for merchants to put some serious thought into the mobile optimization of their websites. On average, 30% of e-commerce transactions in Spain are done on a mobile device.

What should merchants know about appealing to the European consumer?
The European market is very consumer friendly and knowing the different consumer behaviors country-to-country is crucial to ensuring a merchant’s cross-border success. For example, comparative to the US, consumers are provided with longer periods of time to refund their purchases – sometimes a month or more. Also, in Germany online banking is instant. These might sound like minor market idiosyncrasies but are highly valuable for merchants to account for. We pride ourselves on knowing the ins and outs of the consumers our merchants are appealing to.

The European market is on the cusp of great change amid Brexit – how is this impacting consumer sentiment?
I witnessed a great amount of optimism in all three countries. Particularly, as companies look to move the location of their EU headquarters from London ahead of the separation. This appears to be boosting sentiment with consumers and companies alike embracing the possibility of increased business traffic.

And finally, we hear you had some pretty amazing food…
I couldn’t go past the ultimate German combination – bratwurst and beer. But I was also missing my fix for Wiener Schnitzel, which I didn’t realize was such a contentious subject! I found myself being teased by my Austrian friend who said I would have been better served if I went over the border. In Luxembourg, I had to try the national delicacy – Judd mat Gaardebounen. It’s a smoked pork collar dish, which I had sitting outdoors at the farmers market near Grand Ducal Palace. Finally, it was all about seafood in Spain. Baby squid, which they call chipirones, in a fresh fish market, raw seafood served on bread in a standing-only restaurant and choose your own seafood outside the restaurant while it was still alive and within minutes it’s on your plate. Talk about fresh! And of course lots and lots of seafood paella.