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Europe not so cashless after all

In a world that often seems dominated by mobile shopping, card payments and online commerce, we tend to forget that cash is still thriving. Some recent research challenges the view that we're well on our way to becoming a cashless society.

Research by the European Central Bank (ECB) shows that, in 2016, cash was the dominant payment instrument used at the point of sale (POS) in the euro area. It said that 79 per cent of all transactions were carried out using cash, which amounted to just over half – 54 per cent – of the total value of all payments. Cards accounted for 19 per cent of all transactions (39 per cent by value).

Cash surprisingly dominant

The use of cash varies according to country, with more cash used in southern European countries, as well as in Germany, Austria and Slovenia, where 80 per cent or more of POS transactions were conducted with cash. Cash was least used in the Netherlands, Estonia and Finland, where its share in the number of transactions ranged between 45-54 per cent. Sweden, not included in the study because it still uses the kroner, is well known for its low cash usage, the lowest in Europe. Cash is used in fewer than 20 per cent of transactions in stores across the country, according to the Swedish central bank.

The report points out that people tend to overlook the small-value cash transactions they make on a daily basis, leading them to think they are using online or card payment methods more frequently: “When asked about their payment behaviour, people mostly seem to remember the larger value payments which they make less regularly, and tend to forget how frequently they make low-value payments on a daily basis.”

High-value bank notes still a favourite

It also shows that cash is being used not just as payment but as a way to store money for use in emergencies – almost a quarter of consumers keep some cash at home as a precautionary reserve. And the report said that a surprising amount of people use high denomination banknotes: “almost 20 per cent of respondents reported having a €200 or €500 banknote in their possession in the year before the survey was carried out”.

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