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Study: Plastic poised to cut cash use in central, eastern Europe

May 25, 2016

Central and eastern Europe could see a significant increase in bankcard use, as consumers begin to follow their western European counterparts in moving from cash to cards for low-value payments, a new report from RBR asserts.

Western Europeans use payment cards twice as often on average as consumers in CEE, where It is still common to use cards only for cash withdrawals.

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However, habits are changing, and awareness of the benefits of card use is increasing across the region, according to the report, "Payment Cards Issuing and Acquiring Europe 2016."

A relatively new driver is contactless cards, which aim to displace cash for low-value purchases. Particularly in the U.K., retailers have embraced the technology.

A smaller proportion of cards in CEE have contactless functionality, although it is well established in the Czech Republic, Poland and Slovakia.

The RBR report reveals that charge cards have the highest average volume, both in Europe overall, and also in CEE, though in western Europe, debit cards are the most frequently used, and are popular for everyday purchases.

"Debit cards are where we forecast the most growth in card use, with a growing share of consumers owning at least one debit card, and an increasing likelihood that they will use these cards at the point of sale," said project lead Daniel Dawson said in a press release.

The two European regions differ widely in terms of the value of card purchases; in 2014, a card transaction in western Europe amounted to 51 euros ($58) on average — approximately twice the average in CEE. With an increasing number of smaller retailers accepting payment cards, however, average payment values will continue to fall.

Though consumers in a number of markets continue to show a preference for cash, particularly for low-value payments, the RBR report suggests that habits are changing, if gradually.

According to the release, "It is clear that with ever increasing debit card holding and the growing popularity of contactless, payment card use will continue to grow for the foreseeable future."