Portuguese turning their back on physical cash

In Portugal, the use of banknotes and coins has declined, despite it being the country in the eurozone where citizens have less access to payment cards (debit and credit).

According to the SPACE study, carried out by the European Central Bank (ECB), which investigates financial behaviour in the eurozone every two years, among residents of the Monetary Union, the use of physical money has reduced. It is a trend in most eurozone countries, but especially prevalent in southern European countries: Portugal, Greece, Spain, and Cyprus, The Portugal News reports.

But Europeans still like physical money. For 60 per cent of European citizens, being able to have physical money is still important. In addition, people believe that using cash makes them more aware of their spending habits. Faced with possible energy crises and power outages, the discussion of banknotes and coins versus digital payments becomes relevant.

In the 19 countries of the eurozone, payments are generally made with banknotes and coins. But even so, the percentage of cash payments in all transactions dropped to 59 per cent in 2022. Three years earlier, the share was 72 per cent, and six years earlier 79 per cent.

Measured in terms of turnover, card payments are, for the first time, surpassing cash payments. According to ECB data, 46 per cent of sales in stores were paid by card and 43 per cent in cash. Differences in the proportion of coin and banknote payments are due to the fact that small amounts are more often paid in cash, while large amounts are more likely to be paid by debit or credit card.

The survey results illustrate a continuing trend towards fewer physical payments at points of sale. But consumers are also shopping online more and more often. The percentage of e-commerce payments in all payments rose to 17 per cent in 2022, compared to 6 per cent three years earlier. In terms of turnover, the share grew from 14 per cent to 28 per cent.

Most Europeans do not want to do without banknotes and coins. For 60 per cent of Eurozone consumers, these elements are 'very important' or 'quite important'. Germans and Austrians are at the top of the list of fans of physical money.