The study on the payment attitudes of consumers in the euro area* shows that although cash is the most common means of payment in the euro area, there is stable growth in the use of card payments and other non-cash payments. The pandemic gave a boost to contactless payments, but the survey showed that people still think it important to be able to use different means of payment and for the option of paying in cash to be maintained in future.

*The survey was run from March to December 2019 and a total of 41,155 people were questioned, 3023 of them in Estonia. The European Central Bank measured how the pandemic had affected the use of cash in summer 2020.

The main conclusion of the survey is that consumers in the euro area continue on average to prefer cash when making payments at points of sale or between individuals, as 73% of payments are made in cash and 27% using a cashless means of payment, the most popular of which is the payment card, which is used in 24% of payments.

There are wide differences between countries, as cash is used for 88% of payments in Malta and 83% in Spain and Cyprus, but only for 34% in the Netherlands and 35% in Finland, followed by Estonia, where 48% of all payments are made in cash. It is interesting to note that in Estonia’s neighbours to the south, cash is more commonly used for purchases as 68% of payments in Latvia and Lithuania are made in cash.

Payments were made in cash for 48% of all transactions in the euro area by value, while cards were used for 41%. Again there were major differences between countries as the largest shares of the value of payments were 73% in Cyprus and Malta and 66% in Spain, while 41% of transactions by value were made in cash in Estonia and the smallest shares were a quarter of the total value or less in France, Finland, Luxembourg and the Netherlands.

What does the choice of how to pay depend on?

The survey results show that the payment habits and opinions of consumers vary widely between countries in the euro area. Payment habits vary substantially not only between countries, but also between different groups within societies depending on demographic factors and on access to different means of payment including cash. The choice at the moment the payment is made depends on what options for payment the point of sale offers or prefers, and on whether the purchaser happens to have cash or a bankcard with them.

The choice of how to pay also depends a great deal on the size of the payment. In the euro area an average of 92% of payments of five euros or less are made in cash. The share of cash decreases as the amount paid increases, so that only a third of payments for more than 100 euros are made in cash, and card payments or transfers are preferred for such amounts.

Younger people and urban residents generally prefer to pay by card. There is no great difference between men and women, though men are a little more prepared to pay by card. The share of payments made in cash is highest among those aged 65 and over.

The survey found a preference for paying in cash for payments between individuals, and in cafes, restaurants and accommodation providers, while card payments or other non-cash alternatives are used more for purchasing durables and in petrol stations.

Contactless payments

Of all the card payments made in the euro area, 38% were contactless. Again there are very wide differences between countries and these depend largely on when contactless payments were introduced in each country. The limit on contactless payments is clearly also important in this, and the limits were between 25 and 50 euros in 2019. Slovakia had the largest share of contactless payments among all card payments during the survey period with 77%, followed by Greece with 73% and Slovenia with 71%. The lowest share was of 16% in Belgium, and Estonia had only 35% during the survey period, leaving it with plenty of room to catch up with other countries.

Savings in cash

The survey results showed that 34% of respondents hold their savings in cash. Savings are taken to mean any cash that is held above and beyond the everyday amounts people carry in their wallets to pay for consumption. Savings are held in cash to protect against possible crises or against electronic means of payment such as cards failing to work. Cash is held most commonly in Malta, Cyprus and Slovakia, where half the population has savings in cash, while Estonia is not far behind since 46% of the population hold savings in cash. In the euro area on average, a third of the population hold emergency cash of up to 100 euros, around half have savings of 100-1000 euros in cash, and 7% of respondents hold more than 1000 euros in cash. A quarter of the respondents in Estonia have less than 100 euros in cash, a little more than half hold 100-1000 euros, and as many as a tenth of respondents have 1000-5000 euros.

The effect of the pandemic on payment habits

In summer 2020 the European Central Bank measured how the pandemic had affected the use of cash. A thousand residents of each country were surveyed. The survey found that 40% of residents have started to use cash less since the pandemic started and most plan to make fewer transactions in cash in the future. One reason given was that it has become more convenient to use electronic payments, with the example given of the banks raising the limit for contactless payments to 50 euros. Some people also feared spreading the virus by using cash or becoming infected when talking to a sales assistant. Research ordered by the European Central Bank has shown that the probability of being infected with the Covid-19 virus by using cash is no greater than the probability of infection from other surfaces. Recommendations by national governments to prefer contactless payments also had an important impact.

Residents of Estonia differed from those elsewhere in Europe in this, as only 14% of respondents worried about infection from touching cash or coins, while a majority of the population feared it in such countries as Portugal, Ireland and Spain. At the same time, a quarter of respondents in Estonia noted that they had reduced their use of cash during the pandemic.

Overall the survey shows that although cash is the most common means of payment in the euro area, there is stable growth in the use of card payments and other non-cash payments. The pandemic gave a boost to contactless payments, but people still think it important to be able to use different means of payment and for the option of paying in cash to be maintained in future.

Background information

The European Central Bank ran the study on the payment attitudes of consumers in the euro area for the second time in 2019. The survey in 2016 focused on the use of cash, while in 2019 it added payments between individuals, online purchases and payments of invoices to payments in cash and by card. The survey was run from March to December 2019 and a total of 41,155 people were questioned, 3023 of them in Estonia.

The full report can be found at: https://www.ecb.europa.eu/pub/pdf/other/ecb.spacereport202012~bb2038bbb6.en.pdf?05ce2c97d994fbcf1c93213ca04347dd

See the European Central Bank press release https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr201202~0645677cf6.en.html