Regional round up: a delve into payment behaviour across Europe

Understand the payment landscape across Europe as we have summarised the challenges faced by businesses and consumers in each country. The full breakdown of local results is available in our European Payment Report 2023: Country Snapshots White Paper.

European Payment Report 2023: Country Snapshots White Paper
European Payment Report 2023: Country Snapshots White Paper

Central Europe: Transformation is on the agenda

Central Europe, covering: Austria, Belgium, France, Germany, Hungary, Ireland, the Netherlands, Switzerland and the United Kingdom

While businesses across Europe are deferring long-term investment in favour of cost-cutting, Central European businesses are more likely to be prioritising digital transformation than other regions. Seven in ten (70 per cent) see digital transformation as a strategic priority, compared with 64 per cent in Northern Europe.

This drive for digital transformation may come from the anticipated impact on payments. More than half (55 per cent) of the companies in the region anticipate that administrative efficiency will make it harder for customers to pay their invoices on time, the highest across all regions.

Another positive trend within the region is that its businesses are the most likely, across Europe, to have a code of ethics in place to encourage prompt payments. This factor corresponds with more reliable payments on the part of customers. This spirit of responsibility is also reflected in Intrum’s finding that Central European countries are more likely to think about the negative impact that late payments have on smaller businesses than the European average.


Eastern Europe: cost-cutting in the face of employee pressure

Eastern Europe, covering: Bosnia, Bulgaria, Croatia, Czech Republic, Poland, Romania, Serbia, Slovakia and Slovenia

Businesses in Eastern Europe are most likely to say that they are cutting costs as a way to manage the economic downturn and disruption (41 per cent compared with 36 per cent in Northern Europe).

This trend is understandable considering the supply chain pressures that companies across the region have experienced as a result of the war in Ukraine, which is feeding into soaring inflation. In March 2023. In many countries, notably Czech Republic, Romania, and Bosnia Herzegovina, around 90 per cent of respondents say that their employees have asked for high pay-rises or are likely to do so soon.

However, businesses need to be wary of cost-cutting at the expense of growth initiatives, even if this is unavoidable in the short term.

Northern Europe: Inflation strikes in the shadow of Ukraine

Northern Europe, covering: Denmark, Estonia, Finland, Latvia, Lithuania, Norway and Sweden

In Northern Europe, more than half of respondents say their businesses are weaker now than they were 12 months ago, in terms of their revenue, efficiency, and ability to manage disruption. This is higher than in each of the other regions, as well as across Europe as a whole.

This finding aligns with forecasts that output growth this year will underperform across the region, with the exception of Norway. It is likely that the Baltic states and Sweden are already in recession, while Finland and Denmark are projected to stagnate in the coming months.

Inflation in Scandinavia has hit levels not seen for decades. Meanwhile, in the Baltic countries of Lithuania, Estonia, and Latvia – which have been very strongly affected by the war in Ukraine due to their proximity to the conflict and to Russia – we find executives anticipating inflation lasting for at least another year, if not longer, which is notably higher than the European average of 68 per cent.

Within the same countries, however, employees are slightly less likely to be asking for higher-than-average pay increases, which may be because there is less pressure from unions, as outlined above. In Lithuania, for example, 76 per cent of companies say their employees are, or soon will be, demanding higher salaries, which is nine percentage points lower than the average.

Businesses in Northern Europe are also more likely to think that the current period of high inflation will last for more than another year, with 73 per cent thinking this compared with just 61 per cent in Southern Europe.

Southern Europe: Recovery comes slowly

Southern Europe, covering: Greece, Italy, Portugal and Spain

Businesses in Southern Europe are apprehensive about their customers’ ability or willingness to pay their invoices and debts on time. Two in three respondents in the region expect the risk of late/non-payments to grow in the coming year, higher than the European average.

Of all respondents, businesses in Southern Europe are most likely to say that they are finding it increasingly difficult to pay their own suppliers on time, meet rising employee demand for higher wages, and maintain their focus on growth.

After suffering disproportionately during the Covid years, due to their reliance on hospitality and tourism, Southern European businesses are now wary to invest in upgrading their back-office systems. They are more likely to say that their routines and processes are not as strong as they should be to ensure financial sustainability, while most in the region say their finance and administration systems are outdated and prevent them from being agile.

European Payment Report 2023: Country Snapshots White Paper

Access the full white paper today for a full overview of the local results.