The changing role of cash in EU P2P payments
Europe has continued the push towards digital payments, but cash is still very much in the picture. While in December we shared a report on the use of cash in the region, later that month the European Central Bank (ECB) published an update looking at payment attitudes in Euro-using countries in 2024, which contained some interesting insights about the changing role of cash, particularly when it comes to person-to-person (P2P) payments.
Based on consumer surveys across 20 countries, the ECB found that, in 2024, cash still accounted for 41% of P2P payments, which it defined as private payments between individuals (i.e. charitable donations or payments to family members). Though the share of P2P payments that was cross-border hasn’t been specified, the extent to which different payment methods were being used suggests how the population of these countries may be engaging in these transactions more broadly.
Cards and mobile apps were the next biggest category after cash, accounting for 36% of transactions, followed by credit transfers at 11%. Also included were other payment types (spanning cheques, gift cards and other alternative forms of payment), which covered 7% of payments, while instant payments had a 6% share.
Although cash accounted for the highest number of payments, it took a lower share of the total value of payments at 24%, compared to cards and mobile apps at 34% and credit transfers at 29%. The takeaway is that cash appears to be being used more frequently than other payment methods for P2P transactions, but for significantly lower amounts, particularly versus credit transfers.
The report also noted that 35% of P2P payments were made online, with 63% of offline payments being made with cash. This was a decline compared against previous versions of this report in 2022 (73%) and 2019 (86%), though the ECB noted that a change in methodology meant P2P payments couldn’t be compared more widely.
Breaking out usage across different countries highlights the difference in payments instruments across the continent. Germany was an outlier, with cash being used for 74% of P2P transactions in 2024, though it accounted for just 33% of the total value of all P2P transactions. On the other hand, cash made up 47% of the value of P2P transactions in Lithuania, despite accounting for only 31% of transactions.
Italy, Cyprus, Slovenia and Slovakia also used cash most frequently for P2P transactions, with Italy seeing 44% of transfers through cash and the other countries seeing 42%. On the other end of the spectrum, the lowest users of cash were Finland (19%), Latvia (23%), Belgium and Estonia (both 25%), highlighting a much stronger penetration of digital for P2P in these countries.
More widely, the ECB’s latest report shows that despite a trend towards digital payments, the number of cash payments continues to remain significant in 2024.
Read ‘How far has the Eurozone moved toward cashless payments?