The Evolution of the Payment Stack in Europe: Comparing Traditional Acquiring and APMs (Alternative Payment Methods)
1. Context: Why Traditional Cards are Losing Their Monopoly in Europe
Europe is a unique region where "payment champions" have historically emerged within each individual country. Despite the dominance of Visa and Mastercard, European consumers increasingly prefer solutions built on Open Banking (PSD2/PSD3) and instant bank transfers.
Key Drivers of Change:
- Regulation (SCA/3D-Secure 2.0): Stricter authentication has made card payments "friction-heavy" for users (extra clicks, redirects to apps).
- Cost (Interchange Fees): Card acquiring is more expensive for merchants due to the complex chain of intermediaries.
Local Patriotism: In Poland, Blik holds 70% of the market; in the Netherlands, iDEAL holds over 60%; in Germany, Giropay and Sofort lead the way.
2. Comparative Analysis: Cards vs. APMs
Parameter | Payment Cards (Visa/MC) | Alternative Payment Methods (APM) |
User Experience (UX) | Requires entry of PAN, CVV, and expiry (frequently) | 1-2 click payment via biometrics |
Security | Risk of fraud and Chargebacks | Guaranteed payments (no chargebacks) |
Approval Rate | Depends on the issuing bank (80-90%) | High (95%+), as it is a direct transfer |
Geographic Reach | Global (universal) | Local (country by country) |
Settlement | T+3 to T+7 | Often faster (T+1 or instant) |
3. Technical Challenges of APM Integration in Europe
Integrating alternative methods requires a merchant's technical team to solve several problems:
- API Fragmentation: Each method (iDEAL, Blik, Bancontact, MyBank) has its own specifications and transaction statuses.
- Reconciliation: Different methods provide reports in varying formats and currencies.
- Maintenance: Keeping dozens of integrations up to date requires significant development resources.
The Solution: Payment Orchestration
Using a single gateway, such as Concrete Gate Limited, solves the fragmentation problem. Through one API, a merchant gains access to the full spectrum of European APMs - much like a BigQuery connector unifies disparate data into a single warehouse.
4. How APMs Affect Conversion: Case Study
Consider a merchant entering the German market:
- Before APM integration: Only cards available. Abandoned cart rate at checkout: 42%.
- After integrating Sofort and PayPal: Successful payment conversion increased by 28%.
Why did this happen? German users are highly sensitive to data security. Providing card data to a third-party site causes more concern than authorizing a payment through the familiar interface of their own bank via Sofort.
Payment Method | 2021 (Share) | 2023 (Share) | 2025 (Share) |
Digital Wallets (Apple/Google Pay, PayPal) | 26% | 30% | 35% |
Payment Cards (Visa/Mastercard) | 42% | 40% | 38% |
Bank Transfers / A2A (iDEAL, Blik) | 15% | 18% | 20% |
Installments (BNPL - Klarna, etc.) | 7% | 9% | 5% |
Other (cash, checks) | 10% | 3% | 2% |
5. The Future: Where is the Market Heading in 2026?
Trend #1: A2A (Account-to-Account) Payments
Driven by Open Banking initiatives, direct account-to-account payments are becoming the primary competitor to cards. They are cheaper for the merchant and safer for the client.
Trend #2: BNPL (Buy Now, Pay Later)
Integrating Klarna and similar services at checkout has become a standard for Fashion and Electronics segments in Europe.
Trend #3: Digital Euro (CBDC)
Preparation for the Digital Euro will force payment gateways to adapt their infrastructure to state-backed digital currencies.
Conclusion
Traditional cards remain an important tool for international traffic, but in Europe, they have ceased to be the "gold standard." To optimize conversion and reduce operational costs (OPEX), merchants should utilize a hybrid model:
- Cards: For global reach and loyal customers.
- APMs: For capturing local markets and operating in High-Risk segments where payment finality (no chargebacks) is critical.
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