The state of cash in Western Europe is at a crossroads with the rapid development of mobile technology. While several European countries show positive growth in cash usage, there are some that are on track to become cash-free.
The PYMNTS.com Global Cash Index™, a Cardtronics collaboration, uncovers the changing dynamics of the state of cash in Western Europe and the projected effect of the impending Brexit vote on cash usage. For now, while certain countries in the Eurozone are fast moving toward become cash-free economies, the remaining majority of European countries show positive cash growth.
Even though the overall decline in cash’s share indicates a lowering of its position in the payment method hierarchy in the WU-15, its popularity varies from one country to the next. And that decline doesn’t mean that cash is disappearing as a payment method in any absolute sense.
Key takeaways from the Global Cash Index™ for the second quarter of 2016 include:
- About €2.2 trillion in cash is projected to be used for payments in WU-15 in 2020 compared to €2.1 trillion used in 2015.
- A 0.3-percent increase in the compounded annual rate of cash use in WU-15 is expected between 2015 and 2020. The increment underpins double-digit growth in several WU-15 countries, including Belgium, Italy, Malta and Portugal.
- A 1.8-percent decline in cash share of GDP in the WU-15 is expected between 2015 and 2020.
This edition of the Index focuses on 15 Western European countries — the WU-15 — which include Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Spain, Sweden, Switzerland and the United Kingdom. Fourteen of these, with Switzerland being the exception (of course), belong to the European Union; those 14 account for 89 percent of the GDP of the EU.
Is cash usage growing?
With more than €2 trillion in cash projected to be used in Western European countries in 2020 and the rapid development of mobile technology, the state of cash is on its own path of evolution with the growth of cardless ATMs and wider availability of order online and pay by cash on delivery, among other use cases.
While certain countries like Sweden and Ireland are showing negative cash usage growth, the impression of the European economy moving away from cash is far from real. For the Index feature story, PYMNTS caught up with Ron Delnevo, executive director of the ATM Industry Association (ATMIA) Europe, to get a sense of the state of cash across Europe, gauged through growth of the ATM network.
Here’s a sneak peek:
“There are more ATMs than ever before — there’s 3 million-plus now installed, so that’s a positive,” said Delnevo, executive director of the ATM Industry Association in the U.K.
Yet with the advent of mobile technology, consumer sentiment is beginning to change. In a recent poll, more than two-thirds of the surveyed British population said that they think cash will disappear in the next 20 years.
Whether cash usage goes up or declines, it remains imperative that consumers retain the the right and access to use cash or any other form of modern-day payment method, Delnevo argued.
“If it’s a choice and people choose to use it, great, and if they don’t, great too. But we’ve got to give choice to the public,” Delnevo said.
To download the 2016 Q2 PYMNTS.com Global Cash Index™, a Cardtronics collaboration, please fill out the form below:
About the Index
The PYMNTS.com Global Cash Index™, a Cardtronics collaboration, focuses on the use of cash for making payments and as a payment method that equally plays a role with cards, checks, direct debit, and other methods of settling up between consumers and businesses. Unlike most reported estimates of cash, our proprietary data analysis focuses on the use of cash for making payments rather than hoarding.