ECB study
Love for cash is waning
Payments are mainly made in cash at the checkout – still. Because the trend towards digital methods continues. Even if the pace has slowed recently.
Despite the trend towards digital payment methods at the checkout, cash is still the first choice for people in the euro area. An analysis by the European Central Bank (ECB) showed that consumers predominantly use banknotes and coins, especially for small amounts.
But the importance of digital payment options is constantly increasing. Year after year, fewer purchases are made in cash: 52 percent of transactions this year, in 2022 the value was 59 percent, and in 2019 even 72 percent of cash payments were counted in the currency area. At the same time, the proportion of card payments is increasing: from 25 percent in 2019 to 34 percent in 2022 to 39 percent in the current analysis.
According to the survey, which also included national surveys, the share of cash payments at the checkout fell in all euro area countries with the exception of Finland and the Netherlands when comparing the years 2022 and 2024. The largest declines in terms of the number of transactions were observed in Cyprus (11 percentage points), Germany, Malta and Portugal (10 percentage points each).
German citizens’ love for cash is dwindling
Anyone who picks up a note or a coin appreciates the fact that when they look in their wallet they know exactly how much they still have to spend. Anonymous payment without electronic traces is also an argument for cash supporters. But even in Germany, which is considered a country of cash payments, banknotes and coins are on the decline at the checkout counter.
According to a Bundesbank survey published in July, 51 percent of payment transactions in this country will still be processed in cash in 2023. However, that was 7 percentage points less than in the previous study from 2021. At the same time, the proportion of payments with debit cards increased by 5 points to 27 percent, and mobile payments via smartphone increased by 4 points to 6 percent of all payment transactions.
From 50 euros you usually pay by card
On average in Europe, consumers consider paying by card to be quicker and easier. For payments over 50 euros, cards are the most commonly used payment method.
According to the ECB analysis, even in terms of value, cards are the dominant means of payment in the 20 euro countries with a share of 45 percent. Cash accounts for 39 percent, while mobile payments, such as smartphones, account for 7 percent – and the trend is rising. During the Corona pandemic, retailers promoted contactless payment as particularly hygienic. Paying quickly as you walk by is possible using a smartphone or smartwatch, among other things.
Online commerce as a driver for digital payments
“Digital payments continue to grow, albeit at a slower pace,” notes the ECB. One driver is brisk online trading. Internet payments, which are predominantly processed by card, account for a good fifth (21 percent) of all payments and a good third (36 percent) of the total value. In both cases, things have increased since the 2022 investigation.
However, a majority of consumers in the euro area (62 percent) believe it is important that cash remains a payment option. ECB Executive Board member Piero Cipollone reiterates: “We are committed to ensuring safe, efficient and inclusive payment options. By supporting both cash and the development of a digital euro, we want to ensure that people always pay with public money now and in the future can.”
ECB study on payment behavior 2022 Bundesbank study on payment behavior 2024
dpa
Source: Stern
