From where I stand, observing the payments landscape from above, the European Union is often seen as the benchmark. It is associated with standardised infrastructure, clear regulation and a high level of digital maturity. Southeast Europe, on the other hand, is still often perceived as a region that is catching up.
However, that distinction is becoming less convincing.
Regulation As A Foundation, But Also A Limitation
The European Union undoubtedly sets the rules of the game. PSD2, SEPA and open banking initiatives have defined how a large part of both the European and global payments ecosystem functions today. According to the European Payments Council, SEPA now covers more than 35 countries, while SEPA Instant enables transfers within seconds, at any time.
That level of standardisation, however, comes at a cost, and that cost is complexity. For banks, merchants and payment service providers it often means slower change and a heavier regulatory burden.
This brings me to an important nuance. Part of Southeast Europe is already fully integrated into this system. Countries such as Croatia and Slovenia are no longer developing markets in this context. They operate within the same regulatory and infrastructural framework as the rest of the European Union.
One Region, Two Realities
For that reason, Southeast Europe cannot be viewed as a single, uniform market.
On one side are countries within the European Union, where the rules and infrastructure are aligned and where challenges are very similar to those in Western Europe. On the other side are markets outside the Union, where there is more room for local adaptation, but also a higher degree of fragmentation.
This difference becomes particularly visible in the implementation of new payment methods. While the European Union emphasises interoperability and standardisation, markets outside the Union sometimes introduce solutions that are more closely tailored to local customer needs and habits. This does not necessarily make those solutions more advanced, but it does reflect a different approach.
Cash Vs Digital: The Gap Is Narrowing
One of the most common assumptions is that Southeast Europe remains a predominantly cash driven region. While this was true until recently, the situation is changing rapidly.
According to the European Central Bank, non cash payments now dominate in the euro area, with cards accounting for more than half of the total transaction volume. At the same time, reports from the World Bank indicate that Southeast European markets are experiencing faster growth in digital payments than more mature European Union economies.
In other words, the gap still exists, but it is narrowing more quickly than is often assumed.
Mobile As The Standard, Not An Addition
Another area where these changes are clearly visible is mobile banking and payments. According to Eurostat, more than half of users in Europe rely on digital channels to manage their finances.
What is more interesting is how these channels are used. In more developed European Union markets, mobile applications often serve as an additional channel. In parts of Southeast Europe, they are frequently the primary way people manage their finances on a daily basis.
This is not necessarily a sign of greater innovation, but rather the result of a different path of market development.
eCommerce As A Driver Of Change
eCommerce continues to shape this development. Western European markets have already reached a high level of maturity in online retail, while Southeast Europe is still gaining momentum, which is precisely why the pace of change is faster.
Along with that comes the evolution of payment methods. While Western Europe tends towards standardisation, Southeast Europe retains greater diversity, including local methods and hybrid models such as cash on delivery, as well as instant payment solutions based on national systems such as IPS in Serbia, which influence how people choose to pay.
At first glance, this may appear as a lack of a unified approach, but in practice it often means better alignment with real user needs.
So Who Is Ahead?
If we look at infrastructure, regulation and overall volume, the European Union still leads. However, when the focus shifts to market dynamics, the differences become less clear.
Part of Southeast Europe is already fully aligned with European Union standards. The rest of the region is developing at its own pace, sometimes with more flexibility, but also with greater challenges.
Perhaps the real question is not who is ahead, but who brings a different kind of value.
The European Union offers stability, interoperability and security. Southeast Europe, viewed as a whole, offers diversity of markets and different approaches that are often more closely aligned with real needs.
And in the payments industry, that diversity often signals where things are heading next.
Regards,
Edgar