The European Central Bank (ECB) has conducted its second Study on the payment attitudes of consumers in the euro area (SPACE), intending to identify trends in payment behavior and preferences across the euro area. The report compares the SPACE 2022 findings with the results of the 2019 study and an earlier study on the use of cash by households in the euro area (SUCH) conducted in 2016. Full report you can find here.
The Study revealed that cash was still the most frequently used payment method at the point of sale (POS) in the euro area, accounting for 59% of transactions, down from 72% in 2019 and 79% in 2016. Card payments were used in 34% of POS transactions, up from 25% in 2019 and 19% in 2016. Other payment methods were used for 7% of POS transactions. The share of mobile app payments increased from less than 1% in 2019 to 3% in 2022.
Regarding the value of payments, cards accounted for a higher share of transactions (46%) than cash payments (42%). This contrasted with 2016 and 2019, when the percentage of cash transactions was higher than the share of card transactions. Contactless card payments at the POS increased significantly from 41% of all card payments in 2019 to 62% in 2022.
Cash remained the dominant means of payment in person-to-person (P2P) transactions in the euro area, although its share in the total number of payments declined from 86% in 2019 to 73% in 2022 and from 65% to 59% in terms of value. Cashless means of payments, particularly mobile phone apps, increased in P2P payments. Between 2019 and 2022, the share of mobile payments more than tripled in terms of number from 3% to 10% and rose from 4% to 11% in terms of value.
The Study also found that the share of online payments in consumers' non-recurring payments increased from 6% in 2019 to 17% in 2022, with online payments being used primarily for buying food and daily supplies from supermarkets and restaurants. Most recurring payments were made using direct debit or credit transfers.
Chart 1 - Number and value of non-recurring payments by payment situation, 2019 – 2022, euro area
When asked about their payment preferences, 55% of euro area consumers preferred cards and other cashless payments when paying in a shop, while 22% preferred cash and 23% had no clear preference. However, the majority of euro area consumers considered having cash as a payment option to be essential or very important. The perceived key advantages of cards were that consumers don't have to carry cash with them, coupled with the convenience of contactless payments. The perceived key advantages of cash were its anonymity and protection of privacy, and the perception that it makes one more aware of one's own expenses.
Despite the impact of the COVID-19 pandemic on consumer behavior, most consumers (54%) reported no change in how often they use cash at physical points of sale. Of those who reported using cash less often, the most frequently mentioned reason was that paying electronically has become more convenient.
Most euro area consumers were satisfied with their access to cash. The vast majority of consumers (90%) found it relatively easy or very easy to get to an ATM or a bank, up from 89% in 2019. Cash withdrawals were mostly made from automated teller machines (ATMs), which accounted for 74% of all cash withdrawals. The use of own cash reserves accounted for 11%, and withdrawals over the bank counter for 6%.
Use of contactless technology for card payments
Contactless technology allows customers to make payments by simply holding their card or electronic device close to a payment terminal. This has made card payments quicker and more convenient, which were ranked as the second and third most important benefits of card payments in 2022. If certain limits are exceeded, a chip and personal identification number (PIN) must be used for security reasons.
The pandemic has increased the use of contactless payments as people prefer to avoid handling cash or touch payment terminals. Contactless payments accounted for 62% of all card payments in 2022, an increase from 41% in 2019. Different countries in the euro area have varying levels of contactless payment usage, with Cyprus having the highest share and Belgium having the lowest. The percentage of contactless payments in terms of value has also increased significantly, with Greece and Finland being the only countries where it declined. Cyprus, Slovakia, and Slovenia had the highest percentage of contactless payments by value, while Belgium had the lowest.
Chart 2 and 3 - Share of contactless payments in all card payments at the POS in terms of number and value of transactions by country
Chart 2 - by number of transactions
Chart 3 - by value of transactions
P2P Payments
P2P (peer-to-peer) payments are transactions made between individuals, not involving purchasing goods or services, such as giving money to someone as a gift or donating to a charity. The instruments used for P2P payments differ from those used for point-of-sale (POS) payments. In P2P payments, cash, and mobile payments are used more frequently than cards, which individuals do not commonly accept. Cash is still the most popular means of payment for P2P transactions, but its share has decreased from 86% to 73% in terms of number of payments and from 65% to 59% in terms of value. Mobile payments are becoming increasingly popular for P2P transactions, accounting for 10% of such payments in 2022, compared to 3% in 2019. The use of credit transfers has also increased for P2P payments.
In summary, the SPACE 2022 study by the European Central Bank found that while cash remains the most frequently used payment method at the point of sale in the euro area, its use has decreased compared to previous years, and card payments, particularly contactless ones, have become increasingly popular. The Study also showed an increase in the use of mobile payments, particularly in person-to-person transactions, and a rise in online payments for non-recurring purchases, especially for food and daily supplies. Despite the shift towards cashless payments, most consumers still consider having cash as a payment option important, and most are satisfied with their access to cash.
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