Cash continues to dominate POS payments in Europe

Supporters of digital payment schemes like to push the idea that a cash-free future is just around the corner, yet fully three-quarters of all Euro zone payments at the point-of-sale are still made in cash, according to the European Central bank.

  27 6 comments

Cash continues to dominate POS payments in Europe

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

The data comes from a survey conducted by the ECB to mark the launch of the new €50 bank note.

“Even in this digital age, cash remains essential in our economy,” Mario Draghi, President of the ECB says. “A soon-to-be-published survey on cash use, carried out on behalf of the ECB, shows that over three-quarters of all payments at points-of-sale in the euro area are made in cash. In terms of transaction values, that’s slightly more than half.”

The survey is based on a daily diary completed by 65,281 respondents between October 2015 and July 2016. Respondents were asked to note all payments made at points-of-sale, such as supermarkets, shops for durable goods, bars, restaurants and street markets. The ECB survey covered 17 countries. National studies with similar methodology were conducted by the national central banks in Germany and the Netherlands.

The €50 is the most widely used euro banknote denomination. With over 9 billion of them in circulation, they account for 46% of all euro banknotes.

New €100 and €200 banknotes featuring improved security against counterfeiting are set be issued at the beginning of 2019.

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Comments: (6)

Bo Harald

Bo Harald Chairman/Founding member, board member at Trust Infra for Real Time Economy Prgrm & MyData,

Sad. Some years ago there was an estimate by EU that the cost to merchants for handling cash amounts to 50billion every year. Of course the consumer pays every cent of this - but does he/she know it?

 

 

Bo Harald

Bo Harald Chairman/Founding member, board member at Trust Infra for Real Time Economy Prgrm & MyData,

Cash withdrawals and usage has been falling steeply for many years already in Finland - and with mobile payments there will be better balance control > even faster decline ahead. Central bank stats here: https://www.suomenpankki.fi/en/Statistics/payments-statistics/tables/

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

Banks in India have recently announced cash transaction charges for cash withdrawal and deposit exceeding a certain number of transactions per month. AFAIK, this is the first time cost of cash has been made explicit anywhere in the world. So far consumers and merchants alike have been shying away from digital payments which come with explicit cost of MDR / fees and have preferred cash which has had no explicit cost. Customers are hotly protesting this move by banks. If banks succeed in their move, customers and merchants will start suffering an explicit cost for cash and will therefore be more open to accepting digital payments. Let's see what happens.

A Finextra member 

Dear Mr Harald,

Indeed the Nordic countries seem to be in pole position in replacing cash with electronic payments also for retailer spending. How come that the amount of cash in circulation in Finland grows in spite of the rapid growth of electronic payments? Who is using all the cash in the country since everybody seems to be paying with electronics? In other successful electronic payments countries like Norway and Sweden the cash in circulation is shrinking. Is this development based on Finland being in the Euro area and thus exporting Euro bills out of the country? If so - who is holding the growing cash volume?

Bo Harald

Bo Harald Chairman/Founding member, board member at Trust Infra for Real Time Economy Prgrm & MyData,

Mystery - has something to do with x-border exports..

Bo Harald

Bo Harald Chairman/Founding member, board member at Trust Infra for Real Time Economy Prgrm & MyData,

Cash usage in shops is anyway dwidnling - and grey economy as well

 

 

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