Cash or Cards? Digital Euro? Account-to-Account? — By 2030 None Will Win (hint: Your AI Wallet Will)

Written By Yannis Larios

by Yannis Larios

© Yannis Larios - The "White Angels" of Camargue, France // Chosen to showcase the competition between payment methods

Picture a rainy Friday evening in Madrid, 2030. You’ve just asked your phone to order tapas from the bar downstairs, settle last weekend’s trip expenses with friends back in Stockholm, pay the courier and set aside €80 for tomorrow’s AVE tickets to Barcelona. Within seconds your digital concierge obeys—all without ever showing you a pay button. Behind the scenes it weighed half‑a‑dozen rails: an instant SEPA transfer for the food order, a euro‑stablecoin hop for the cross‑border split, a loyalty‑rich card token for the courier, and tomorrow it will tap the digital‑euro balance that earns micro‑interest overnight.

That silent routing choice is the shift European payments is marching toward, and it means the industry’s favourite debate—“Which payment method will dominate?”—is already non-relevant!

Act I: Rails in Flux—But All Getting Faster

Brussels fired the starting gun in 2024 when it passed the Instant Payment Regulation: every bank that offers a regular SEPA credit transfer must, by January 2025, also offer a ten‑second, 24/7 version at the same price—or for free. Overnight, instant A2A payments stop being a premium feature and become the new floor.

Card networks refused to be left behind. In June 2025, Mastercard and Deutsche Bank unveiled “Pay‑by‑Bank”, plugging Mastercard’s open‑banking rails into Deutsche’s merchant gateway so shoppers can pay straight from their account with real‑time confirmation. Mastercard’s EVP for Open Banking called account‑based payments “the new norm,” a phrase that would have sounded heretical five years earlier.

Meanwhile, the digital euro moves through its two‑year preparation phase. The ECB’s plan: decide on legislation by early 2026 and—if politicians agree—roll out a public, programmable euro a few years later. The goal is explicit: give Europeans a home‑grown rail so they are never forced onto foreign‑owned card networks.

Stablecoins are no longer outsiders either. Under MiCA, euro‑pegged tokens such as Société Générale’s EURCV can now be issued under a single EU passport, and non‑bank providers gain direct access to TARGET and TIPS from April 2025. Suddenly a regulated fintech can settle a euro‑stablecoin transfer on the very same plumbing that clears SEPA.

Finally, cash continues its quiet retreat from daily transactions. The ECB’s SPACE survey shows cash’s share of point‑of‑sale payments has slid from 79 % in 2016 to just 52 % in 2024. Even the Eurosystem now speaks of cash as “important for resilience,” not “dominant for daily life.”

Plenty of contenders, all faster and cheaper than last year—yet none destined to rule alone. Why? The answer is just below.

Act II: The Rise of the AI Wallet - every transaction becomes a mini-auction

In 2025 Visa launched Intelligent Commerce, opening its network to developers building AI agents that can find and buy on a user’s behalf. A week later Mastercard debuted Agent Pay, a token layer that lets an AI not only place items in the basket but “recommend the best way to pay” before it checks out.

ARK Invest puts numbers on the shift: by 2030, AI purchasing agents could drive nearly US $9 trillion in online spend every year. Think of a Siri‑grade assistant that knows your reward schemes, your balance, last night’s wine subscription and tomorrow’s cash‑flow forecast—and optimises every euro accordingly.

Even merchant economics start to bend. A 2024 PYMNTS study found firms were willing to knock 2 % off the price if a customer used Pay‑by‑Bank instead of a high‑fee card. A human shopper might ignore that prompt; their AI will not. Two bots haggling over rails is no longer sci‑fi—an academic team this year demonstrated AI‑to‑AI price negotiations outperforming humans in test markets.

The logic is relentless: once an algorithm is free to optimise for cost, speed, rewards, FX or ESG score, no single rail is optimal all the time. Habits evaporate; every transaction becomes a mini-auction!

Act III: When “Dominant Payment Method” Stops Making Sense

By the early 2030s, consumers across Europe will still see familiar brands—Visa, Mastercard, local schemes. SEPA Instant, Digital Euro, EURCV—but the choice moves backstage. Your AI might pay the family grocery run via your 5 %-cashback card token, fund the Friday bar tab through an instant account-to-account push of money (the pub offers a €2 discount for account-payments...), and settle your Airbnb in a digital euro that satisfies host and regulator. You will simply see “Payment successful.”

Regulation accelerates the shift. PSD3 drafts now circulating in Brussels bake premium open‑banking APIs—balance check, variable‑recurring payments, confirmation‑of‑payee—into law. Banks must expose them, and PSPs must allow token portability. Simultaneously, the EU’s AI Act tightens transparency rules: by August 2025, general‑purpose AI models must log every high‑value decision, including payment routing. Openness is no longer a courtesy; it’s compliance.

Strategic Outlook: Dominance shifts from the rail to the orchestrator

Put it together and the old question—cash or card?—dissolves. In practice the dominant payment “method” in 2030 or 2035 is the AI‑orchestrated experience itself. Rails compete under the floorboards; value flows where the algorithm sends it.

Consumers win on convenience and cost. Merchants win on lower acceptance fees and smarter steering. Providers win only if their rails stay attractive to a machine that has zero loyalty and perfect price awareness. Dominance shifts from the rail to the orchestrator.

The Next Agenda—Two Critical Board‑Room Decisions for Banks and Payment Service Providers to Take Now

1. Own the switchboard, not the socket. Re‑imagine your Bank or Payment Service Provider as Europe’s smartest circuit breaker. Authorise a plan that turns every token—card, SEPA Instant, digital euro, stablecoin—into a plug‑and‑play module reachable through PSD3‑grade APIs. Build a merchant‑facing policy engine where human or AI buyers at every side of the transaction, can set rules like “never pay more than 30 bps” or “prefer the lowest‑carbon rail,” and log every routing decision for AI‑Act auditors. Openness is not a compliance box; it is the flywheel that keeps your endpoints top‑of‑list for tomorrow’s autonomous agents.

2. Re‑price, re‑risk and re‑govern for algorithmic commerce. Monetise insight, not transaction fees: sell dynamic‑routing spreads, fraud‑graph enrichment, payment‑retry AI, carbon‑footprint scoring, instant FX hedging and context‑aware loyalty swaps—then charge subscription tiers or outcome‑based “smart‑savings” instead of a flat per‑transaction toll. Set a KPI that 50 % of volume is multi‑rail optimised by 2028. Install a board‑level AI & Ethics committee before regulators do it for you. Bake “portable‑token” clauses into every merchant contract—because the next lock‑in war will be over data, not payment rails. Do this, and when 2030’s AI wallets start shopping, your rail is always a click (or an API call) away.

Epilogue

In 1995 the web made URLs more important than phone numbers. In 2030 the AI wallet will make the payment rails that you already set up less important than results. The real contest now is to be the smartest node in a network where money moves at machine speed. Whoever masters that orchestration—bank, fintech, card network or newcomer—won’t just dominate payments; they’ll make the very idea of manually choosing a payment method feel as quaint as dial‑up internet.

 

If this resonates, please consider subscribing to “The Next Agenda”. For briefings or board-level discussions, feel free to reach out to me; Independent Non-Executive Director dialogues welcomed where my expertise adds value.

References

Yannis Larios https://larios.gr
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