Even in the euro zone, king cash is about to lose its throne

Cash accounts for just over half of all transactions in the bloc

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The European Central Bank (ECB) headquarters in Frankfurt. The results will likely strengthen an argument inside the ECB that it needs to introduce a digital euro. — Reuters file

By Reuters

Published: Sun 22 Dec 2024, 5:42 PM

Last updated: Sun 22 Dec 2024, 5:43 PM

Cash is close to losing its status as the main means of payment in the euro zone, traditionally one of the most resistant corners of the developed world to the rise of electronic payments, European Central Bank data showed.

An ECB biennial Study on the Payment Attitudes of Consumers in the Euro area (SPACE) showed that cash now accounted for just over half of all transactions in the bloc at 52 per cent, down from 59 per cent in 2022. Its share had been as high as 79 per cent in 2016.

Card payments continued to gain ground, rising from 34 per cent to 39 per cent in the last two years. Mobile payments' quota doubled to six per cent.

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The results will likely strengthen an argument inside the ECB that it needs to introduce a digital euro, practically an electronic wallet with the central bank, to ensure residents have access to a risk-free means of payment even in a cash-free world.

"By supporting both cash and the development of a digital euro, we want to guarantee people can always choose to pay with public money, now and in the future," ECB board member Piero Cipollone said.

Cards have long overtaken cash as the dominant means of payment in terms of value, accounting for 45 per cent of all euros exchanged in the latest survey compared to cash at 39 per cent.

Meanwhile, in European Union member Sweden, where electronic payments are most prevalent, authorities are worried about what might happen if those channels were disrupted.

In a brochure entitled "If there is a crisis or a war", Sweden recommends that people keep enough cash on hand to last a week.

The country's central bank has called on the government to force businesses selling essential goods such as prescription medicines, food and fuel, to accept cash and to strengthen cyber-security measures in the financial system.

With most banks no longer offering cash services at their branches, the central bank has also opened a number of cash depots to ensure access to cash across the whole country.

Reuters

Published: Sun 22 Dec 2024, 5:42 PM

Last updated: Sun 22 Dec 2024, 5:43 PM

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