Tiina Soosalu, Eesti Pank expert on developing payments
Martti Näksi, Head of the Cash Handling Division

The survey of payment behaviour* conducted this autumn to an order from Eesti Pank found that people and companies in Estonia are very satisfied with how convenient, modern and secure the payment solutions available in Estonia are. At the same time, people and businesses are worried about the number of scams going around. More than half of those who responded to the survey are in favour of removing one and two-cent coins from circulation.

The majority of residents of Estonia, at 88% of respondents, make their everyday purchases mainly in shops. The share of respondents who mainly make purchases online has fallen to 3%. In the previous survey in 2021, when the Covid-19 restrictions were still in place, 84% of respondents mainly made their purchases in shops. Those shopping online are more prevalent than the average among younger people and those with higher incomes.

Paying by card was the most common choice for 82% of respondents, while the respondents who prefer to pay by smartphone or smartwatch instead of bankcard have increased to 8%. The share of those aged who pay with smart devices was higher among those under 30, at 21%. Just like a couple of years ago, 10% of respondents prefer to pay mainly in cash, while 86% of respondents use cash for everyday purchases at least a couple of times a month or more. Cash is mostly used when card payments are not possible, and for small payments and payments to private individuals. There were 14% of respondents who said they do not use cash for purchases, and these figures were the same as in 2021.

The survey found that 52% of respondents were in favour of rounding the end-prices of purchases in cash and removing one and two-cent coins from circulation, while 30% were opposed. These shares among respondents were the same as in the previous survey in 2021. Support for a completely cash-free society is however 6% lower than in the previous survey, as 21% are in favour of a fully cash-free society while 51% were opposed.

People’s opinion about access to cash is largely the same as it was in 2021. Some 49% of respondents said that access to cash has not changed, 10% thought that access to cash has improved recently, and 23% considered that access has become worse. The majority of people at 89% prefer to withdraw cash from ATMs. There are few who prefer to withdraw cash from bank offices or shop tills, with 3% preferring each.

The request-to-pay solution for personal payments in mobile banks¹ is used by 33% of respondents, but users of the solution were more common among those aged below 30 at 57%. Although the solution has gained new users, a large part of the population have not used it, while 16% do not even know that such a solution exists.

Residents of Estonia have a very high opinion of the payment solutions offered by the banks, as they scored the payment solutions at 4.4 out of 5 for convenience and modernity, and 4.2 out of 5 for security. All these opinions are a little higher than they were in 2021. At the same time, a lot of respondents expressed concern about how active scammers are, which has the consequence that users of payment systems do not feel secure. There were also some respondents who have suffered a loss to fraudsters. The concern about scams shows how widespread the problem is, but also shows that people are aware of it and consequently act more cautiously.

A survey of the payment behaviour of companies was run this year for the first time, and it found that the most important consideration for companies when they choose banks is whether the services they need are in place, which mattered to 60% of respondents, and secondly the price of services, highlighted by 55%. Good client service is considered very important by 50% of respondents, while the positive reputation of the bank and whether loan conditions are favourable and investment opportunities good were also priorities. Larger companies have higher expectations of the banks – favourable borrowing conditions, good interest rates on deposits and good opportunities for investment are much more important for them than they are for smaller companies.

Some 64% of companies hold their current accounts at only one bank. Companies that have 50 or more employees mainly use the services of at least two banks though, while a quarter of those with 250 or more employees have accounts at four or more banks. The main reason for having a client relationship with multiple banks is that the prices of products and services and the convenience of them vary between banks, according to 62% of respondents. Another reason that was important for 54% of respondents is to allow the clients of the company to pay for goods or services at whichever bank suits them better. Other reasons that were mentioned included spreading risks and the recommendations of parent companies.

Only 9% of the companies that responded to the survey are able to make payments in the event of an outage such as their cash tills not working, a power cut, or data communications being lost. Smaller companies are even less prepared for such situations, though companies with more than 50 employees are a little better off. Companies that have made preparations mostly said they had put aside cash reserves or purchased IT services to cope with cyber attacks for example. Backup generators that could help in a power cut were also mentioned, though less often, as were preparations to make payments on site in a bank office, or to pre-confirm time-critical payments.

Companies, like the people in Estonia, have high opinions of how convenient, modern and secure the payment solutions are. They awarded a score of 4.3 out of 5 for convenience, and 4.2 out of 5 for security and modernity. The worry that was mentioned most frequently concerned the number of scams. Companies considered that the services provided by banks are generally good and sufficient.

Despite the good opinions though, both surveys and detailed feedback indicated that services could still be made even better. There is interest in new payments solutions like by using QR codes in shops or telephones between individuals. There are also expectations for wider use of e-invoices because these solutions are harder for scammers to abuse.

Watch out, there are scammers about!

• Banks or other institutions will never ask for the number of your bankcard, the CVV code, your username at your bank, or your PIN codes over the telephone or by email. If you get a call or an email asking for this information, it is most probably a scam.
• To carry out banking transactions or other banking business, log into the internet bank or mobile app as usual. Do not do so by using a link sent in a message or email.
• You should not save any attachments sent with unsolicited messages or emails.
• Postal companies will never send a message asking you for money for a package. If you get such a message, you may assume it is a scam.
• If you receive a suspicious telephone call, it is best to hang up, especially if the caller does not speak in your native language.

¹ This solution through a mobile app allows a message requesting money to be sent to friends or acquaintances by SMS, email or another channel. The payer gets all the information they need on the amount and the account number automatically, and only has to confirm the payment. This solution works for accounts within the same bank.

*Eesti Pank ordered two surveys in 2023:

The survey of the payment behaviour of residents of Estonia was carried out by RAIT Faktum&Ariko. It ran from 4 August to 6 September and there were 1020 respondents from all across Estonia.

The survey of Estonian companies was carried out by Kantar Emor. It ran from 25 September to 12 October and there were 531 respondents from businesses across all sectors of activity.

Additional information:

Viljar Rääsk
Head of Communications
Eesti Pank
Tel: 5275 055
[email protected]