The global COVID-19 pandemic has certainly accelerated the trend towards brick and mortar decline and a high demand for contactless payment services. PayPal has been around since 1998 and has been one of the predominant mobile payment services for over the past decade. Square Inc. is another fintech whose main asset Cash App has recently beat downloads for PayPal’s similar service Venmo globally. But in the European Union, it appears that PayPal still reigns supreme as it was the most downloaded fintech app during 2020. To many, PayPal seems ancient compared to the newer fintechs on the block, but PayPal was actually able to join forces with many global banks making their spread from the US rapid. This older service has actually been most popular with Gen X and the Baby Boomer generations, which range from about 40 – 65 years old. The primary reason for this is most likely how older citizens are at more risk of death than younger and healthier people during the pandemic, so PayPal seems to be a long-standing and trustworthy contactless payment method.
PayPal, which is a US based company, being more popular than European based fintechs has given them a worthy challenge to gain a larger share of European customers. However, at least for the time being, EU fintechs aren’t even in the same lane and often have a hard time directly competing with PayPal. The reason PayPal will most likely continue having a long-running advantage is European fintechs are usually much more specific than PayPal, meaning it can offer a lot of similar services in one place. One thing that’s working in favor of smaller fintechs is that much of the customer base actually likes having specific apps for different tasks, like banking, shopping, or trading stocks. An example of a banking app preferred in the UK is Monzo, which has come second to PayPal with around two million downloads this past year.
Not only have PayPal and Monzo done particularly well in this space, but big banks share the profits. Commercial bank apps have become wildly possible over the past few years, and many are useful to have when linking your bank account to another app such as Venmo or Cash App. Mobile downloads of commercial bank apps have also seen a large increase this past year, with more people spending the most amount of time on their apps. This spike even greatly exceeds 2019, and appears to keep continuously growing into the coming years. A good question to ask going forward is will the European Union’s fintech consumers continue to prefer specific apps for different tasks, or will they fold and do the majority of their transactions via PayPal.