ECB Study Finds Cash Still King, As Switzerland To Vote On Keeping Cash Forever

February 10, 2023
A recent study by the European Central Bank (ECB) has found that cash is still the eurozone’s most common payment method, while Swiss voters have secured a referendum on keeping cash.

A recent study by the European Central Bank (ECB) has found that cash is still the eurozone’s most common payment method, while Swiss voters have secured a referendum on keeping cash.

This week, the ECB discussed new data showing that the majority of point of sale (POS) payments within the eurozone are made using cash.

In 2022, the ECB found that 59 percent of point of sale (POS) payments were made using cash, while 34 percent were made using cards and 3 percent were made using mobile.

Although cash is still the most common form of POS payment in the eurozone, its usage has declined significantly over recent years.

In 2019, when the ECB conducted a similar study on consumer payment attitudes in the eurozone, cash accounted for around 72 percent of POS payments, down from 79 percent in 2016.

Despite widespread and accelerated adoption of digital payments across the EU following the COVID-19 outbreak, the latest data from the ECB suggests there are still significant opportunities available for payment firms to further grow non-cash payments.

Ulrich Bindseil, director general of market infrastructure and payments at the ECB, and Doris Schneeberger, ECB's director of banknotes, said the results of the 2022 study show that payment habits from the pandemic era have “outlasted” the restrictions that caused them.

A similar effect can be seen in the shift in attitudes towards cash payments among eurozone consumers, they said.

In 2022, although most payments were still made in cash, 55 percent of consumers said they would prefer to pay by card or by another cashless payment method at the POS.

Among these consumers, their main reason for this preference was to avoid the inconvenience of having to carry cash.

But cash still has a sizable number of users for whom it is their preferred payment method at the POS.

In 2022, 22 percent of consumers said they prefer to pay by cash in POS scenarios and their main reason for doing so was to help them budget more easily.

Finally, the remaining 23 percent of consumers had no preference between cash or cashless payments at POS.

Bindseil and Schneeberger said the study shows that consumers appreciate freedom of choice when it comes to payments and that a healthy payment system should guarantee a range of options.

“As cash remains widely used and valued, we are committed to maintaining euro cash and will continue to make sure it is available,” they said.

“Today and tomorrow, European citizens will pay with different methods but with the same stable, reliable money: the euro,” they added.

The ECB survey was answered by 39,765 respondents across 17 eurozone countries, while the central banks of the Netherlands and Germany conducted their own surveys, whose results were factored into the eurozone totals.

Swiss voters secure referendum on cash for keeps

Meanwhile, in Switzerland, a campaign group has secured a referendum on keeping cash as a protected payment method under law.

The Free Switzerland Movement (FBS) has filed a petition to parliament with more than 100,000 signatures, which is enough to trigger a public vote on the issue under Switzerland's system of direct democracy.

The petition, which has more than 157,000 signatures at the time of writing, proposes that from March 2023 onwards: “Anyone who wants to pay with cash must be able to pay with cash."

In effect, this would result in a payment choice law being passed in Switzerland, making it mandatory for merchants to accept cash.

The FBS wants to see cash protected primarily based on freedom of choice and privacy grounds, but also for technical and security reasons.

“Cash is freedom because it can be used anywhere and anytime,” the group says on its website. “Cash promotes independence because we are not dependent on technical systems (electricity, card readers, internet).

“Cash creates security against negative interest rates. Cash is [also] an important part of our Swiss culture of voluntary and peaceful cooperation.”

Richard Koller, president of the FBS, added that Switzerland is one of the few countries in Europe that could pass such a law, due to its sovereign currency and its non-membership of the EU.

Quoting German author Hansjörg Stützle, Koller said that, in eurozone countries, even if a payment choice law of this kind was passed on a national basis, it could be superseded by the ECB.

“There is the principle that European law takes precedence over national law,” the website said, quoting Stützle. “Cash would therefore have to be anchored in the EU treaties."

However, these concerns may be unfounded. Alongside its planned legal framework for a digital euro, which is tipped to be published in May, the European Commission intends to also present a regulation that clarifies the legal tender status of euro cash and ensures that citizens will have access to cash in the future.

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