In recent years, the way we make payments has undergone a significant transformation. The European Central Bank (ECB) has analyzed the payment habits of eurozone residents, revealing a steady decline in the use of cash. In 2024, cash accounted for only 52% of transactions in physical stores, compared to nearly 80% just eight years ago. While cash remains the most widely used payment method in physical stores, its dominance is slowly fading.
The ECB’s survey, which covered 18 eurozone countries and included over 41,000 respondents, examined not only in-store purchases but also online transactions and person-to-person (P2P) payments. The results show that card payments are gaining popularity, accounting for 45% of transaction values in stores, while cash accounts for 39%. Mobile payments are also on the rise, with their share more than doubling since 2022 to reach 6%.
However, payment habits vary significantly across countries. In southern Europe, such as Malta, cash remains the dominant payment method, used in 67% of transactions. In contrast, northern European countries like the Netherlands are leaders in cashless payments, with only 22% of transactions made with cash. Interestingly, Finland and the Netherlands have bucked the trend, registering a slight increase in cash usage.
Demographics also play a significant role in shaping payment habits. Older individuals are more likely to use cash, with 57% of transactions in the 65+ age group involving cash, compared to 45% among younger individuals (18-24 years). Education and income levels also influence payment preferences, with individuals with higher education and income levels preferring cashless payments.
Cash still dominates P2P payments, accounting for 41% of transactions, although its value share is only 24%. Germany stands out among eurozone countries, with an impressive 74% of small P2P payments made in cash, significantly higher than the regional average.
The Rise of Contactless Payments
Contactless payments have become increasingly popular in recent years, with many European countries witnessing a significant surge in their adoption. In Poland, for example, contactless payments have grown by over 50% in the past year alone, with over 70% of POS terminals now supporting contactless transactions.
The growth of contactless payments is largely driven by the convenience and speed they offer. With no need to insert a card or enter a PIN, contactless payments are not only faster but also more secure. Furthermore, many banks and financial institutions are now offering contactless payment cards, mobile apps, and wearable devices, making it easier for consumers to adopt this payment method.
The Future of Payments
As payment technologies continue to evolve, it’s likely that cash will play an increasingly smaller role in our daily lives. The ECB’s survey highlights the growing popularity of cashless payments, including mobile payments, contactless payments, and online transactions.
In Poland, for instance, the value of non-cash transactions has grown by over 20% in the past year, with mobile payments increasing by a staggering 50%. These trends are expected to continue, with many experts predicting that cash will eventually become obsolete.
In conclusion, the ECB’s survey provides a fascinating insight into the changing payment habits of eurozone residents. As digital payments continue to gain traction, it’s clear that the future of payments will be shaped by convenience, speed, and security. Whether it’s contactless payments, mobile payments, or online transactions, one thing is certain – the way we make payments is undergoing a radical transformation.