The digital euro in everyday payments

The success of the digital euro will not be determined by its technical architecture alone, but by how naturally it integrates into everyday payment situations. Whether in online shopping, at the point of sale, or in peer-to-peer transactions, users expect payment processes to be fast, familiar, and frictionless.

At the same time, each payment context follows its own logic, shaped by long established habits, existing infrastructures, and differing expectations toward convenience, trust, and availability.

The digital euro does not represent a single payment experience, but a set of payment options that must adapt to different usage contexts. For banks, this raises a central strategic question which payment scenarios should be prioritized and how the digital euro can be integrated in a way that complements established user behavior.

The following sections examine the digital euro across three core payment contexts: e-commerce, point of sale and peer-to-peer payments. For each context, the focus lies on concrete payment options, their alignment with existing habits, and their relevance from both a bank and an end user perspective.

The Digital Euro in E-Commerce

In e-commerce, the checkout is the decisive moment of truth. Users expect speed, familiarity, and maximum simplicity because any friction might directly increase the risk of cart abandonment. At the same time, the German online market remains dominated by a small number of payment methods: PayPal (27.7%), purchase on account (26.7%), and direct debit (16.7%) together account for the majority of transaction value.¹

Against this backdrop, a key question arises for the digital euro: Which existing online payment methods could realistically be substituted by a digital euro, and what would a digital euro payment look like at checkout from a bank and customer perspective?

The figure illustrates four core options that are closely aligned with existing user habits.

In-App Payment/Merchant Integration

The most seamless option is a direct in-app or checkout integration. In this scenario, customers select “Pay with digital euro” during checkout, initiate the payment from their wallet, and the transaction is settled in real time, for example via an alias or a Digital Euro Account Number. From a user perspective, this feels familiar and intuitive, comparable to established wallet-based solutions such as PayPal.

For banks, this integration is strategically central, as it positions the digital euro wallet as the primary customer interface and embeds it directly into everyday digital payment journeys.

Pay-by-Link (Checkout Link)

Another option is Pay by Link. In this scenario, the merchant generates a payment link that already contains all relevant transaction details such as the amount and reference information. The customer receives the link via email, messenger, or as part of an invoice. When clicking on it, the user is redirected directly to their banking app or digital euro wallet, where the payment screen opens with the amount pre-filled. After reviewing the details, the customer confirms the transaction via biometric authentication or another strong authentication method, and the payment is settled instantly on the digital euro ledger.

This model is particularly suitable for services, invoice-based payments, or remote transactions. While it is unlikely to become the dominant model in mainstream online retail, it can serve as a flexible and user-friendly complement where embedded checkout integration is not available.

QR Code Based Checkout

A third approach is QR code based checkout. In this case, customers scan a QR code with their smartphone during the online checkout process and confirm the payment on their mobile device.

Technically, this model is relatively easy to implement. However, because it adds an additional step compared to embedded checkout flows and since common established payments methods work differently, its long-term relevance in European e-commerce is likely to remain limited.

The Digital Euro at the Point of Sale

At the point of sale, such as in physical retail stores, restaurants, or vending machines, payment is a tangible, everyday interaction. While digital payment methods are the only viable options in e-commerce, payments at the point of sale are still strongly influenced by cash. According to the ECB’s SPACE Study 2024, consumers in the euro area use cash for 52% of POS transactions by number. In terms of transaction value, cards have already overtaken cash, accounting for 45% compared to 39%. Mobile payments via smartphones remain a niche at around 6% of transactions, but their volume has doubled since 2022.²

Against this backdrop, a key question arises for the digital euro: How can the digital euro integrate into established POS payment habits, and which POS payment options are most relevant from a bank and end user perspective?

The figure illustrates four core POS payment options that reflect today’s payment behavior while extending it with digital euro specific capabilities.

Contactless Payment using Smartphone (NFC)

At the point of sale, the digital euro can be used in several ways, each with different implications for user adoption and strategic positioning. The most important option is contactless payment via NFC. In this scenario, the digital euro is processed directly at the POS terminal through the NFC interface, initiated from the user’s wallet and authorized immediately.

From a customer perspective, the experience mirrors existing tap-and-pay solutions, which minimizes behavioral change and lowers adoption barriers. For banks, NFC is strategically critical because it keeps them visible and relevant in everyday payment situations where customer interaction is most frequent.

QR Code Based Payment

An alternative is QR code-based payment. Here, customers scan a QR code displayed by the merchant or printed on a receipt and approve the transaction within their app. Although this approach is technically easy to implement and can be useful in specific contexts, it generally offers a less seamless user experience compared to NFC.

From a banking perspective, QR payments are therefore more of a fallback or niche solution, for example at temporary sales locations, rather than a scalable and strategically central POS model.

Offline Payment

Offline payment represents a distinct functional layer. It allows value to be transferred directly between devices without an active internet connection, with balances exchanged in a way comparable to physical cash.

This enhances resilience and ensures payments remain possible during network outages. Strategically, offline functionality comes closest to the logic of cash and can serve as a key trust argument, particularly for customer groups that continue to rely heavily on cash and value a high degree of privacy.

Physical Payment Card

Finally, the digital euro can also be accessed via a physical payment card, similar to a debit card used at the POS. This option is essential for financial inclusion, as it enables participation for individuals who do not wish to use a smartphone. By offering a familiar form factor, it supports universal usability of the digital euro across different population segments and strengthens its role as a broadly accessible means of payment.

In order to increase practicality, banks might co-badge existing payments cards instead of issuing sole digital euro cards to their customers.

The Digital Euro in Peer-to-Peer Payments

P2P payments describe private payments between individuals such as paying back borrowed money or giving pocket money.

Despite the growing availability of digital payment solutions, cash remains the dominant P2P payment method in the euro area. According to the ECB’s SPACE 2024 survey for the euro area, cash accounted for 41% of all P2P payments by number, followed by payments via cards and mobile apps (36%). Instant payments still play a minor role, representing only 6% of P2P transactions which might, however, be due to the fact that the instant payments regulation only recently demanded instant payments to be priced like a SEPA transaction or below. Looking at value rather than volume, cash remains particularly relevant for higher-value transfers.³

Against this backdrop, a central question for the digital euro arises: Which P2P payment scenarios could realistically be addressed by a digital euro, and where would this offer clear value from both a bank and end-user perspective?

The figure illustrates four core P2P payment options that are closely aligned with existing peer-to-peer payment habits while extending them into a digital euro context.

Alias-based Transfer

In the peer-to-peer context, the digital euro offers several interaction models with different levels of persistence and scalability. The most intuitive option is alias-based transfer, where users send money using familiar identifiers such as a phone number or email address. The payment is confirmed in the wallet and settled instantly.

This closely mirrors existing P2P habits and therefore represents the most scalable model. For banks, alias-based transfers are strategically central, provided interoperability across institutions ensures strong network effects.

Request-to-Pay

Request-to-Pay adds another layer of convenience. One user sends a payment request, which the other confirms in their digital euro wallet. This is particularly suitable for everyday scenarios such as bill splitting or reimbursements.

While it enhances user experience and engagement, it is unlikely to drive volumes on its own and should be seen as a complementary feature.

QR Code Based Transfer

QR code-based transfers are more situational. The recipient provides a QR code that the sender scans to initiate the payment. This model is useful for ad hoc interactions where no persistent identifier is available, e.g. at a flee market.

Mobile Payment (NFC/Offline)

Finally, mobile P2P payments via NFC introduce the most cash-like interaction model. Two users bring their devices close together to trigger the transaction, which can be processed online or, in certain configurations, offline. This enables direct value transfer between devices without relying on a continuous internet connection and therefore comes closest to the functional logic of cash.

The model is particularly relevant for spontaneous, in-person payments and for scenarios where offline availability increases resilience. Strategically, it acts as a complementary extension to digital P2P interactions rather than a replacement for identifier-based transfers.

Conclusion

The use cases analysed make it clear that the digital euro should not focus on a single form of payment, but must be capable of supporting a variety of scenarios in a user-centred manner.

This presents banks with an opportunity to strengthen their role in the payments sector by integrating the digital euro specifically into relevant everyday situations. To do so, they should draw on existing payment habits and build upon familiar interactions.

Ultimately, the success of the digital euro will be measured by how well it can replicate familiar processes whilst simultaneously creating new, tangible added value.