The European Central Bank (ECB) has revealed that although cash payments are decreasing, digital payments have not yet fully replaced them.
Despite the growing shift towards digital payments, cash payments remained prevalent in 2024, particularly for small-value transactions and person-to-person exchanges. This was revealed in the results of the ECB’s latest study on consumer payment habits in the euro area (SPACE).
As the financial sector continues to innovate new payment methods, the increasing share of digital payments is driven by a rise in online transactions. These now make up 21% of consumers’ daily payments by number and 36% by value, compared to 17% and 28% respectively in 2022.
Cards remain the most commonly used payment method for online purchases, representing 48% of transactions, followed by other electronic payment options like digital wallets and mobile apps, which together account for 29% of transactions.
The ECB has stated that it is committed to protecting consumers’ freedom to pay as they choose.
Piero Cipollone, Executive Board member of the ECB, remarked: “We are dedicated to ensuring secure, efficient and inclusive payment options. 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.”
This shift towards modern payment methods is further supported by consumer preferences. In 2024, as in 2022, 55% of consumers prefer using cards and other non-cash methods for in-store payments, while 22% still opt for cash. Additionally, 23% of consumers have no clear preference regarding their payment choice.
The majority preference for cards is attributed to consumers finding them faster and more convenient to use. However, many still view cash as a better tool for managing expenses and safeguarding their privacy.
Furthermore, cash continues to be seen as an essential payment option, with 62% of consumers in 2024 (up from 60% in 2022) considering it important to have access to cash.
This aligns with data released by NatWest in November, which highlighted the continued reliance on cash in specific contexts, especially when it comes to certain spending and budgeting situations. The report revealed that 54% of ‘vulnerable individuals’ regard cash as ‘essential,’ marking an increase from 47% two years ago.
Despite these views, cash transactions are decreasing. At the point of sale, cash is used in 52% of transactions, a drop from 59% in 2022.
