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Cash still predominant payment form in Europe – ECB study

The European Central Bank (ECB) has conducted a comprehensive study to analyse
the use of cash, cards and other payment instruments used at points of sale (POS)
by euro area consumers in 2016.

The paper presents the results of the study, including an estimation of the number and value of payments made with cash and cards by consumers in the euro area during the period under consideration. The study also assesses the use of each payment instrument by consumers at the
country level.

Number and value of payments in the euro area in 2016

The survey results show that in 2016 cash was the dominant payment instrument at
POS. In terms of number, 79% of all transactions were carried out using cash,
amounting to 54% of the total value of all payments. Cards were the second most
frequently used payment instrument at POS; 19% of all transactions were settled
using a payment card. In terms of value, this amounts to 39% of the total value paid
at POS.

The use of cash and cards differs according to country, place of purchase,
transaction value and consumers’ demographic characteristics. In terms of number
of transactions, cash was most used in the southern euro area countries, as well as
in Germany, Austria and Slovenia, where 80% or more of POS transactions were
conducted with cash.

Market share of payment instruments at points of sale

Cash was least used in the Netherlands, Estonia and Finland, where its share in the number of transactions ranged between 45% and 54%. In terms of value, the share of cash was highest in Greece, Cyprus and Malta (above 70%), while it was lowest in the Benelux countries, Estonia, France and Finland (at, or below, 33%). When looking at the demographic characteristics of euro area consumers, it can be concluded that men tend to use cash more often than women.

Furthermore, consumers aged 40 and over use more cash than younger age groups,
whereas cash usage appears to be relatively homogeneous across different levels of

Overall, the results put the use of cash relative to non-cash payment methods by
consumers at POS into perspective, and indicate that the use of cash at POS is still
widespread in most euro area countries. This seems to challenge the perception that
cash is rapidly being replaced by cashless means of payment.

Indeed, as the results of this study show, when consumers are asked which means
of payment they prefer, a larger share report to prefer cards rather than cash –
despite the fact that they use cash more often.

This contradiction may be explained by the fact that nearly two-thirds of the transactions conducted at POS in 2016 were below €15. Moreover, two-thirds of all POS transactions took place in shops for purchases of day-to-day items, as well as in restaurants, bars and cafés. On the
other hand, only 8% of all POS transactions were above €50, and only 14% were
made in shops for durable goods or in petrol stations.

When asked about their payment behaviour, people mostly seem to remember the
larger value payments which they make less regularly, and tend to forget how
frequently they make low-value payments on a daily basis.

Access to payment cards does not seem to fully explain differences in payment
behaviour, because on average access is high in all euro area countries. However,
there seems to be a relationship between card acceptance (i.e. the perceived
availability of card payment terminals) and cash usage. It can therefore be expected
that in countries and market sectors where card acceptance is still low, cash usage
may decrease once infrastructure for making card payments becomes more widely

Although the share of contactless payments in many countries is still low, the survey
results suggest that the speed with which such payments have been embraced in
some countries may mean that once payment cards and POS terminals are enabled
with contactless technology on a wider scale, the share of contactless payments
could increase significantly.

Since contactless payments are typically relatively low value and 81% of all payments at POS are below €25, this could have a significant impact on the use of cash for smaller value payments, especially given that respondents who prefer cash and those who prefer cards both appear to place importance on the transaction speed of their preferred means of payment.

The study confirms that cash is not only used as a means of payment, but also as a
store of value, with almost a quarter of consumers keeping some cash at home as a
precautionary reserve. It also shows that more people than often thought use high
denomination banknotes; almost 20% of respondents reported having a €200 or
€500 banknote in their possession in the year before the survey was carried out.

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