Euro area consumers are gradually shifting towards cards for in-person retail payments, although cash remained the most used instrument at the end of 2019, according to data published by the European Central Bank.
Last year, consumers used cash for 73% of their point-of-sale and person-to-person retail transactions (48% in value terms). In a previous ECB study conducted in 2016, the figure was 79% of these transactions (54% in value terms).
The use of cards for in-person retail payments increased by five percentage points over the same three years, from 19% to 24% (41% in value terms). Almost four out of ten card transactions were made using contactless technology in 2019.
For their online shopping, euro area adult consumers paid mainly by card (49% of transactions) and one out of four online transactions was made using e-payment solutions. Four out of ten bill payments were made using direct debit and two out of ten by credit transfer.
In order to understand the potential impact of the ongoing pandemic on consumers’ payment behaviour, the ECB complemented its 2019 study with an ad hoc survey carried out in July 2020. Four out of ten respondents replied that they had used cash less often since the start of the health crisis. While most of those who fell into this category expected to continue to do so after Covid struck, the long-term impact on payment behaviour is still uncertain.
Although the evidence shows cash payments on the wane, ECB board member Fabio Panetta, cautions against an overwhelming rush to digital payments, pointing out that they remain vulnerable to disruptions, such as power blackouts, cyber threats and technical failures
"In such situations, cash can support resilience in payments: owing to its unique features, it provides a crucial backstop and a trusted store of value," he says. "Our payment survey shows that 34% of euro area citizens keep extra cash reserves at home for precautionary reasons.
"Consumers’ freedom to choose their payment method is of the utmost importance to us. Therefore we aim to ensure acceptance of and access to cash throughout the euro area, while promoting innovation on digital payments, including in our work on the possible issuance of a digital euro.”