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Cash vs. card – instruments of payment in the Eurozone

Frankfurt/Main – According to a recent study conducted by the European Central Bank (ECB) people in Germany carry around more cash than in any other country of the Eurozone. In 2016 the German citizens had €103 in their wallet on average – the average of all European countries came down to only €65. Following Germany comes Luxembourg (€102) and Austria (89). Portugal (29), France (32) and Latvia (41) make up the tail light.

The study shows that cash is valued more by the European consumers than one would have thought. Experts forecasted the end of bills and coins after the introduction of cashless payment. Yet, the ECB thinks we are still lacking the technology that is necessary for such a major transition.

If we look at the number of transactions that are made by cash, Malta is placing first (92 percent) followed by Cyprus (88), Greece (88), Spain (87) and Italy (86). In Germany 80 percent of the transactions are cash-based. So loyalty to cash is not only withheld to people in Germany.

The ECB has interviewed more than 65,000 European citizens for their analysis: Even though cashless means of payment such as credit and debit cards have been spread, cash remains the dominant force. 79 percent of the payments have been made by cash, followed by card, making up 19 percent on average. «The results make it seem questionable, if cash will be replaced by cashless methods anytime soon», infers the European Central Bank.

Nonetheless, there is a slope between the «cash-loving», southern countries as well as Germany, Austria and Slovenia on the one hand and Finland, Estonia and the Netherlands on the other hand. Only 45 percent of the transactions in the Netherlands have been made by cash. The same pattern could be observed in Estonia (48) and Finland (54).

Another difference was found looking at age and gender. Males used cash rather than females, but they also made more payments per day, regardless of the means of payment. People who were older than 40 also used cash more often than younger people. According to this the transactions made by card decrease for people older than 40. On the contrary, the level of education did not make a big difference.

The ECB tries to explain the popularity of coins and bills by looking at the amount of money people spend per payment on a day-to-day basis. Almost two thirds of the payments were less than €15. Amounts up to €45 were most likely paid by cash.

People did not only limit using cash for payments. Almost one fourth of the people keeps cash at home for bad times. A surprisingly large number of consumers said they recently owned €200 and €500 banknotes: Almost 20 percent.

In the meantime, the ECB predicts cashless payment methods like contact-less reading by card or smartphone-app will spread as soon as they will be widely accepted at check-out. In countries including Germany, where cards are often not accepted, payments by cash should be decreasing by then, too. This conclusion is drawn by looking at countries where means of cashless payment became more popular after introducing the required technology.