Eesti Pank participated in the ECB’s study carried out to assess and analyse the social cost¹ of various payment instruments. The study showed that in Estonia, 0.96% of GDP is spent on different payment instruments. In the European Union, the respective indicator was around 1% (about 130 billion euros).

According to the study, half of the social costs of different payment instruments are incurred by commercial banks and the other half is incurred by retailers. The share of central banks and cash–in-transit companies was very modest (3% and 1%, respectively).

As a result of the relatively widespread usage of cash, the aggregated social costs of cash payments make up nearly half of the total social costs. In Estonia, the share of cash costs was beyond the average: the aggregated social costs of cash payments accounted for 62%.

The estimated unit social cost of cash payment was the lowest, 0.42 euros, whereas the unit social cost of a card payment was 0.7 euros. Estonia belonged to the cluster of countries, where card payments had a larger share and the unit social cost of a card payment was lower than that of a cash payment (0.22 euros and 0.32 euros, respectively).

The ECB’s study provides an integral overview of the usage of different payment instruments in Estonia, since it also looked at the usage of cash. The payment statistics collected by Eesti Pank reflect mainly non-cash payment instruments. According to the study, cash payments made up about a half, card payments a third and payment orders a fifth of all payments. Based on Eesti Pank's payment statistics, card payments accounted for 63%, payment orders 31% and direct debit 6% of all non-cash payments made in the first three quarters of 2012.

¹ Social costs are the costs related to the provision of payment services in the different parts of the payment chain, such as central banks, commercial banks, cash-in-transit companies, the infrastructure, and retailers. Costs incurred by individuals are not included here.

The objective of the ECB’s study of costs related to payment instruments was to clarify the cost-effectiveness of different payment instruments in order to promote a more efficient payment environment. The study also provides an overview of the difference of the costs related to the most popular payment instruments across countries.

The study included the measurement of the costs of using cash, debit and credit cards, direct debit and payment orders in the different parts of the payment chain. For Estonia, data from the year 2010 were used.

13 national central banks in the ESCB participated in the study: Danmarks Nationalbank, Eesti Pank, Central Bank of Ireland, Bank of Greece, Banco de España, Banca d´Italia, Latvijas Banka, Magyar Nemzeti Bank, De Nederlandsche Bank, Banco de Portugal, Banca Naţională a României, Suomen Pankki, and Sveriges Riksbank.

The study is available on the ECB’s web site. 

Eesti Pank's statistics on payment and settlement systems are available on Eesti Pank’s web site. Eesti Pank publishes its comment on the statistics once a quarter (in the month following the end of a quarter). 

Further information:

Ingrid Mitt
Eesti Pank
Eurosystem
Public Relations Office
Telephone: 668 0965, 512 6843
E-mail: [email protected]
Media queries: [email protected]