Cash is not dead yet. At least in Spain. Despite the impulse of credit cards or digital means of payment, and even with the coronavirus crisis involved with the corresponding confinement, at least in Spain its citizens they continue to throw away more coins and bills than in any other way to buy. In fact, it ranks as one of the countries in the area where ‘cash’ is a priority, since 83% of transactions are carried out with coins or bills, according to the latest report from the European Central Bank (ECB).
In this way, Spain is at the same level as Cyprus (with another 83% as well) and only behind Malta, where 88% do so. If you compare the radiography of payments with respect to the great European powers, the difference is abysmal. The average of the euro zone draws cash in 73% of the purchases made daily by its citizens. In three years (from 2016 to 2019) the use of coins and banknotes has fallen by almost six percentage points, while in Spain this decrease has been four points. In fact, in terms of volume of transactions carried out, Spain ranks first in the ranking of cash payments, as it represents two-thirds of all transactions carried out by consumers in this country, ahead of the rest of the euro zone territories.
As is the case historically, northern European countries are the ones that lead retail payments with credit cards or other means such as transactions over the Internet. By contrast, in southern states, cash remains a primary tool for understanding consumer behavior. For example, while in Finland or the Netherlands the use of currencies already represents only 35% and 34% of payments, respectively, this ratio reaches 82% in Italy, 81% in Portugal and 80% in Greece .
Cash is used much less in northern countries: in Finland it only accounts for 35% of all payments
In addition, the country in which the use of cash has been decreasing the most has been Finland (almost 20 percentage points less), followed by the Netherlands (11 points less), Ireland and Luxembourg (10 points less, respectively), as well as in France (9 points) and Greece (8 points).
Although the ECB data refers to payments made in 2019, the institution wanted to include an appendix in the report to address the issue of the way purchases are made during the pandemic. The coronavirus has changed all habits, by establishing a confinement that restricted the possibility of making many purchases for weeks, which has led citizens to use virtual channels, something that in many cases was unknown until the arrival of the health crisis.
In Spain, Ireland and Belgium, half of those surveyed admit that they have paid less in cash in the pandemic
Average Eurozone consumers admit that cash was used to settle 38% of supermarket transactions, 57% of small-store transactions for everyday items and 63% of transactions in restaurants, bars and cafes.
Also, 8% of respondents say they had not paid in cash since the start of the pandemicBut of those who had been paying in cash, just over 35% said they had experienced a situation in which cash was not accepted (17% rarely, 13% sometimes, and 5% often).
If the behavior of citizens during the health crisis is compared by country, the ECB report reveals a “great variation” in the statistics. For example, in Spain, Ireland and Belgium more than half of those surveyed admit that they have paid less in cash since the pandemic. Many of the acquisitions have materialized through the internet. But even in many other cases, those in stores, Spaniards have also thrown away more cards to avoid contact with cash as a security measure. The advancement of cards in Spain contrasts with other countries, such as Latvia or Malta, where only 25% of consumers admit having used this payment method more than cash as a result of the disease.
The bills do not infect
The Spanish are, together with the Portuguese, the European citizens who have been most concerned about touching cash as a way to get the coronavirus. Specifically, 62% of those surveyed by the ECB have shown this fear, although in the neighboring country that percentage exceeds 70% of the population. On the contrary, 35% of Spanish citizens are not concerned about touching coins or bills when paying. In the case of the European average, 55% of citizens have not felt uncomfortable with the ‘cash’ in their hands.
In any case, the ECB recalls that “banknotes do not represent a particularly significant risk of infection compared to other surfaces with which people come into contact in daily life.” Several studies of the institution show that coranaviruses can survive on a stainless steel surface 10 to 100 times longer than on cotton bills. “When you touch the banknotes, the amount of potentially transferred virus is so low that the risk of infection is negligible.” Regardless of the mode of payment, the protection measures recommended by the World Health Organization (WHO) should continue to be observed, such as “washing hands frequently and maintaining social distance,” recalls the ECB spokesperson.
On the other hand, payments with a mobile device (for example, a phone or a smartwatch) has not shown a breakthrough, despite what you may think at first. Because more than half (53%) of those surveyed affirm that they do not have one of these payment instruments.
2,500 euro limit
The strength of cash in Spain, even despite the coronavirus, contrasts with the latest proposals regarding the limitation of the use of coins and banknotes in certain purchases, to avoid the underground economy, much more relevant in our country than in others many European territories.
In Spain, the cash payment limit of 2,500 euros was established at the end of 2012 in the law that tried to fight against tax fraud in the midst of the economic, financial and debt crisis. Since then, the prohibition of carrying out operations in coins and banknotes was established – until then, the 500 euros were regularly moved between certain professionals and groups of the population – whose amount was higher than that amount. In the case of tourists, the limit is 15,000 euros.