Exploring Digital Payments in Europe
In light of its ongoing research into a Central Bank Digital Currency (CBDC), the European Central Bank has undertaken a study of digital payment methods, seeking to understand present payment habits and inform a potential digital euro. Participants in the study were concerned such a development might undermine cash, which is a popular means of payment in Europe.
Regarding present payment behaviour, the study shows cash is widely used—especially for smaller amounts—though debit cards are the most common choice for day-to-day shopping. Mobile payments are also popular, while credit cards, bank transfers and other methods are used in more specific circumstances.
The study notes that, while there is a trend towards digital payment methods, cash remains highly valued in many countries. It is preferred due to a lack of added fees and ‘because it suits some customers’ profiles.’
On the business side, merchants reported accepting a wide range of payments, including cash, cards, online and mobile payments. While they expressed a readiness to cater for more digital payments, they also pointed out the importance of keeping cash and other payment options available for their customers.
The values of cash highlighted around discussion of digital options include its ease of use, its support of people having ‘full control of their expenses’, the possibility of using it offline and the privacy it offers. Its safety and security were also cited amid concerns around keeping personal information secure.
I use a debit card for most of my payments… If the amount is very small or it is a smaller store, I use cash. I also like to take part in county fairs or the market, and there I need cash… I have made several bigger transactions (over €1,000) in cash.