COVID-19 has prompted consumers in the euro zone to switch to cashless transactions

For the first time in 2019, more than half of all consumption in the euro zone is in cashless transactions, according to a European Central Bank survey released Wednesday.

Moreover, since the COVID-19 outbreak, consumers in the euro zone have been paying more by card and less in cash, and they intend to continue to do so after the outbreak, as businesses take steps to make electronic payments easier.

Euro zone consumers are using less cash as contactless payments are made via cards, phones and even smartwatches. The outbreak has accelerated this trend.

The figures show that, for the first time in 2019, consumers in the euro zone will pay less than half the total amount paid when buying goods, while the new crown epidemic has accelerated the trend of cashless transactions.

Some 40 per cent of respondents in the ECB survey said they had reduced their use of cash since the COVID-19 pandemic, with 87 per cent planning to maintain this habit even after the outbreak is over.

The most important reason for the change in payment habits is that retailers have taken steps to make electronic payments easier, and consumers are more likely to use cashless payments because they fear getting infected by touching cash.

The survey was conducted in the last two weeks of July this year. A total of 17,779 people were interviewed across the euro area.

The ECB also released the results of a separate survey conducted last year, which showed that 49% of respondents preferred credit cards or other cashless methods of payment, up from 43% in 2016.

Consumers in the 19 countries that make up the euro group will pay only 48 percent of their purchases in cash in 2019, Agence France-Presse reported, citing a European Central Bank survey on consumer attitudes. A similar survey in 2016 showed that consumers made 54% of their cash payments.

In 2019, it is more common for cash to be used for small purchases in the eurozone in terms of personal consumption transactions. But the amount spent on electronics has risen from 19 per cent three years ago to 24 per cent, a full five percentage points. Nearly four out of every 10 electronic payment transactions are made using contactless electronic payment technology.

In terms of consumption on Internet commodity trading platforms, adults in the euro area now account for 49% of the transaction volume through bank cards, and a quarter of online transactions are conducted through electronic payment methods. Four out of ten of these payments are made directly by payment card and two tenths by bank transfer.

A separate European survey released in July on the impact of COVID-19 on cash payments found that nearly half of respondents were using less cash than at the start of the epidemic, and nearly 90 percent intended to continue using less after the outbreak was over.

The European Central Bank is currently considering whether to introduce digital currencies, according to AGence France-Presse. Supporters say the move will help make payments easier and reduce costs.

So far, the euro system has not decided whether to introduce a digital euro. But like many other central banks around the world, the ECB is exploring the benefits, risks and operational challenges of doing so.

Source: AFP, etc