How Europe’s fintechs can scale across fragmented markets

A 2026 State of Fintech in Europe report produced with Visa Direct forecasts the sector will expand from $85.52 billion in 2025 to $94.14 billion in 2026. The report identifies market fragmentation, differing national rules and uneven infrastructure as key barriers for firms seeking to expand across the region.

The report describes how national differences in licensing, consumer protection and enforcement can force companies to change legal, compliance and product setups when entering a new country. Firms often need new local partnerships, adjusted contracts and separate compliance teams to meet each market’s requirements.

Infrastructure gaps affect rollout speed and cost. Variations in payment rails, local banking connections and identity systems mean that a payments product or onboarding flow that works in one country can require technical redesign in another. The report notes that some markets have adopted instant-payment networks and new rails faster than others, creating inconsistent consumer experiences.

Regulatory divergence raises the cost of compliance. Companies operating in multiple jurisdictions must meet different reporting rules, staffing requirements and data regimes. For lending and wealth platforms, the report points to extended timelines for authorizations and for finding local distribution partners. Payments firms face separate challenges in connecting to national settlement systems and meeting local reconciliation standards.

New technologies are changing product design and operations. The report highlights advances in artificial intelligence, upgrades to payments infrastructure and growing use of digital assets as factors altering risk models, customer service and product features. It states that companies must map technical changes against local legal and operational requirements as they expand.

The report and an associated webinar outline partnerships with banks, payment processors and local technology providers as one route to reduce duplicated licensing, gain access to settlement systems and address compliance needs. The webinar will feature Olga Ovchinnikova, head of Visa Direct Europe, with Scott Hamilton as moderator, and will discuss practical approaches to expansion.

The analysis separates strategies by segment: neobanks often focus on securing local banking partners and harmonising know-your-customer processes; payments firms prioritise rail integration and settlement speed; wealth and lending platforms allocate resources to authorisations and consumer protections. The report records the projected growth and documents the operational and regulatory work firms face when expanding across Europe.