Cash still dominates consumer payments in the eurozone, even as many Western economies are rapidly moving toward electronic payments, a survey published on Friday by the European Central Bank (ECB) showed.
The figures indicated that the eurozone is one of the slowest among big Western economies in giving up cash, trailing countries such as the US, Britain, Australia and Canada.
Almost 79 percent of point-of-sale (POS) transactions were done in cash last year, with the rate in Germany, the bloc’s biggest economy, at 80 percent, underscoring German unease over the ECB’s decision to phase out 500 euro (US$596.65) notes, a move widely perceived as a first step in moving away from cash.
Having lived through devastating world wars and hyperinflation, economically conservative Germans rely heavily on cash and even in their banking prefer simple saving products, particularly cash deposits.
By contrast, cash is only used for about 15 percent of similar sales in Sweden, with cash in circulation having declined for years, Sveriges Riksbank data showed.
The Dutch and the Estonians last year used cash the least in the eurozone, with less than half of transactions in cash.
Cash is so vital in the eurozone that the average consumer carries 65 euros in their wallet, with Germans holding more than 100 at any one time.
However, highlighting a potential game changer, the ECB said that contactless payments could rapidly increase the number of electronic transactions.
In such sales, consumers tap their cards or smartphones against a terminal, completing small-scale purchases instantly, often without the need to enter a personal identification number.
“The survey results suggest that the speed with which such payments have been embraced in some countries may mean that once payment cards and POS terminals are enabled with contactless technology on a wider scale, the share of contactless payments could increase significantly,” the survey said.
Still, contactless payments accounted for just 1 percent of sales, the survey showed, suggesting that any change is likely to be protracted.
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