Europe’s digital wallet market has been running at full sprint for some time now. Spending through mobile wallets surged at a 27% CAGR between 2021 and 2025, reaching $2.4 trillion. But the engine of that growth – card-funded xPays like Apple Pay and Google Pay – is about to shift. A new architecture is emerging, one built on account-funded payments, domestic champions, and the pan-European solution Wero. The transition has already begun in some markets and others will follow. For financial institutions, merchants, and payment providers, the next five years will differ from the last five.
In-Store Momentum Masks a Deeper Transition
The headline growth has been impressive. In-store wallet spending in Europe climbed 37% annually from 2021 to 2025, far outpacing online growth at 16%. Apple Pay and Google Pay led this charge, especially in large markets including the UK. Apple Pay captured more than half of digital wallet volume in France and Italy. In the Netherlands, it accounts for 79% of all wallet spending.
But things are forecast to change: account-funded payments are now projected to grow faster than card-funded ones. Between 2026 and 2031, account-funded wallet spending will expand at a 14% annual rate, compared with 12% for card-funded payments.
Why Account-Funded Payments Are Growing
The shift is being driven by two forces: Wero and domestic wallets.
Wero, the European Payments Initiative’s pan-European digital wallet, launched P2P payments in mid-2024 and is now rolling out P2M (person-to-merchant) capabilities across the region. It represents a direct challenge to xPays by offering banks and consumers a way to pay directly from their bank accounts without going through a card network. Germany activated Wero for online P2M payments in November 2025. The Netherlands is transitioning iDEAL – its dominant A2A payment method – to Wero, a shift expected to complete by the end of 2027. France and Belgium are implementing it for e-commerce. The solution won’t replace PayPal or Apple Pay everywhere, but in markets with strong heritage of account-funded payments, it is likely to be successful.
Equally important are domestic wallets. In Switzerland, TWINT accounts for 70% of digital wallet volume and makes up 63% of in-store spending – the highest account-funded proportion in Europe. In Poland, BLIK hit 55% of all wallet volume in 2025 and represents 23% of all cashless consumer spending, a share that keeps growing. Sweden’s Swish accounts for 73% of online wallet spending. Belgium’s rebranded Bancontact Pay is accelerating in-store. Spain’s Bizum, which launched in-store P2M payments in May 2026, is already the fastest-growing solution in the market, so these are no longer niche players.
What drives adoption of these solutions is straightforward: lower cost for merchants, and consumer familiarity with direct bank transfers in some markets. Bancontact Pay operates via QR codes in-store – especially cost-effective for small merchants. Bizum, entirely account-funded, eliminates intermediaries, giving merchants better economics than cards. Poland’s BLIK, however, has supported card-funded in-store payments since 2021, which has enabled it to expand its addressable market without cannibalizing its core account-funded base.
Local Players Are Adapting to the Emergence of Wero
The Netherlands presents the clearest transition case. The dedicated A2A solution iDEAL is a longstanding solution for online payments. Once iDEAL migrates to Wero by end-2027, digital wallet growth will be significantly boosted.
Germany shows a different pattern. PayPal accounts for 72% of online wallet spending and 30% of all online consumer spending. But two account-funded solutions – Giropay and Sofort – were discontinued in 2024. With Wero now live for online P2M and in-store P2M expected in late 2026, account-funded payments are forecast to grow at 20% annually, compared with 14% for card-funded.
Poland’s growth is constrained by saturation, as BLIK already accounts for over half of digital wallet volume. Similarly, Sweden and Switzerland face headwinds because Swish and TWINT have already achieved such deep penetration that growth is limited to the expansion of the overall payments market.
Meanwhile, Italy remains an outlier. Over 90% of wallet spending there is card-funded. Satispay, the local account-funded wallet, has gained traction but only represents 2% of online and 5% of in-store volume. Wero is not expected to launch in Italy; instead, the European Payments Initiative plans to work toward interoperability with Bancomat, Italy’s domestic infrastructure. The country will take longer to shift.
In-Store and Online Are Converging
One more pattern deserves attention: in-store payments have been the growth star, but in some markets, online spending is accelerating faster now. Poland’s online wallet spending grew 33% against 21% in-store. This may seem like a small reversal, but it signals that consumers are open to new solutions. As Wero rolls out in-store capabilities and domestic wallets add card-funded options, the distinction between channels will matter less.
What This Means for Financial Institutions and Merchants
For banks, Wero’s rollout is both opportunity and threat. FIs that build Wero integration into their banking apps gain a direct payment channel without card scheme dependencies.
For payment providers, the message is clearer: account-funded payments are not a second-tier offering. They’re the channel where regulatory tailwind, FI commitment, and consumer adoption are converging. European wallets over the next decade will look fundamentally different from today’s landscape, with less daylight between what is successful online and in-store, and far more account-funded volume running through infrastructure built by banks, not tech giants.
To learn more about our European Digital Wallets research, visit here. If you’d like to gain full access to the study or discuss the findings, reach out to Daniel Dawson at [email protected]
