How do you pay for things?
The options for cashless payment are increasing – payment cards, payment systems, virtual currencies... These all have an impact on trade and of course on customers. Yet there are big differences within Europe as regards how willingly new forms of payment are accepted.
Germany: Better safe than sorry
In Germany, borrowing money is basically frowned upon – this is the reason why credit cards were unpopular for so long. However, paying conveniently by card is catching on, apart from for small amounts. It is for this reason that contactless payment, which is particularly suitable for small amounts, has not yet become established.
Germany is also a difficult market for new payment systems. Although businesses are keen to introduce innovative systems quickly, customers tend to lag behind and it is necessary to build up their trust first.
Nevertheless, e-commerce has shown very strong growth in recent years, since the Germans are enthusiastic online shoppers and naturally pay for these purchases by card.
Italy: Prepaid card instead of bank account
Cash is king in Italy – but payment cards are becoming more and more common. Prepaid cards are particularly popular. Banks and the post office prefer to issue these cards to minimize the credit risk, since many Italians do not have a bank account.
However, the main reason why credit cards are relatively unpopular in Italy is that Italians prefer to put their faith in "safe" cash, owing to uncertainties about the economy. Nevertheless, the law states that amounts over EUR 1000 must not be paid in cash, in order to ensure traceability. This is intended to combat corruption.
Switzerland, Luxembourg and Liechtenstein: a matter of course
In these countries, cashless payment is taken for granted – and online shopping has grown strongly in the past few years. Citizens of Switzerland and Liechtenstein, in particular, benefit from paying by card because of currency differences. When they pay by card, they do not have to bother about the foreign currencies used in other European countries.
In these three countries, debit cards are preferred to credit cards – apart from for online shopping, of course – so there is still good growth potential for credit cards. New technologies, such as paying by mobile, will gradually become more common.
Austria: Strong growth
Thanks to the positive economic situation, card payments in Austria have soared since 2013. Here again, people mainly pay using debit cards. The widespread introduction of contactless payment should drive this growth even more strongly. The first experiments with contactless payment using smartphones have already been conducted – but the system is still in its infancy here.
Poland and Hungary: Technology-friendly
Since economic growth kicked in later in these two countries than in their western neighbours, Poland and Hungary are now benefiting from the fact that the infrastructure for cashless payment is recent and not yet outdated. This led to a whole generation of technology being skipped, so new technologies tend to be accepted more rapidly. However, the proportion of cash payments is very high – as much as 90% in Poland. Many Poles have payment cards but do not use them very often. In these countries, as in Germany, owing money or using credit is frowned upon. The Poles, especially, do occasionally make smaller payments by card, so there does not appear to be any great reluctance there.
Scandinavia: A cashless society
The Scandinavian countries are in the vanguard of cashless payment. Cards are the main method of payment in all areas of life here. Indeed, it is often the only possible way to pay, and in shops and restaurants cash is not generally greeted very warmly. The Scandinavians cite hygiene, security, convenience and crime prevention as the main reasons for this attitude.
Cashless payment is clearly on the rise, even though it is not yet all that popular in many countries, for various reasons. In all probability, Europe will increasingly follow the example of Scandinavia, since the advantages of cashless payment are so evident.