Market study on competition in online payments

We are pleased to announce that our “Market Study on Competition in Online Payments” has been published by the European Commission. The study was caried out by a consortium comprising Lear, Capgemini and Verian, and led by Lear.

This study analyses the intensity of competition in the online payment sector in the EEA, with a focus on 14 countries.

A novel database allows to identify the most commonly used payment methods and the main operators offering them in the period 2018-2022. A consumer survey and a consultation of various industry stakeholders complement the data, providing evidence on the drivers of consumers’ and merchants’ choice of payment method, the frequency of use of payment methods, as well as on the competitive relationship among providers of payment methods.

Finally, a behavioural experiment provides original evidence on the causal effect of display practices on consumer choice of payment method.

•  examines the competitive dynamics in the sector and the main recent market developments, and finds that while innovative payment methods have emerged – including those offered by Big Tech companies, traditional methods such as cards maintain a strong presence in many of the selected countries;
• identifies certain structural features of the sector which may be conducive to entrenchment of market power;
• analyses the competitive role and economic incentives of key industry players such as international card schemes, banks, Big Tech companies and Paypal.

This project was led by a Lear Team comprising partner Alessia Marrazzo, senior consultant Elena Salomone, senior advisor Elena Argentesi and junior consultants Tommaso Carbonara and Thomas Bianchi. The project team also included Marius Mosoreanu, Raphaël De Landsheer, Osmo Jarvi, Camilla Salutari, Silvia Bossi and Kostantin Koch from Verian, as well as Stefan Huch, Ben Bosmans, Astrid Verhallen and Nico Pradel from Capgemini.

📄Check out the full report here