Cash Continues to Decline in Europe
Nov 30 2007 : European cash payments are declining and now account for only a third of total European household expenditure, says market research firm Datamonitor. The value of cash payments in Europe was € 1,787 billion (US$2,651 billion) in 2006, accounting for 33.9 percent of total household expenditure, down from 37.6 percent in 2002.
The gradual move away from paper-based payment methods is noticeable even in countries where cheques historically have accounted for a significant proportion of consumer spending, says Datamonitor. To encourage the transition, card issuers have been promoting facilities such as cash-back at the point of sale.
As cash and cheque payments have declined, general-purpose payment cards have been the fastest growing payment tool in Europe, says Datamonitor. General-purpose cards include credit and debit cards. They are issued by banks and can be used at locations accepting cards affiliated with international or local card schemes. By contrast, private-label cards can only be used at retailers affiliated to a specific card label.
Over the 2002-2006 period, the value of general-purpose card consumer expenditure grew at a compound annual growth rate of 13.8 percent to € 981 billion, or 18.6 percent of total European consumer expenditure in 2006, says Datamonitor.
While the growth in electronic payments in general and payment cards in particular is expected to grow in Europe, cash as a payment tool is by no means dead, Datamonitor analyst Ouliana Vlasova points out.
