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What is your favourite payment method?

On 19 December, the European Central Bank published the results of its latest study on the payment habits of euro-area consumers. Here are some data: 55 per cent of consumers prefer paying by card or other digital tools, such as mobile phone apps in shops, 22 per cent prefer paying in cash, while 23 per cent have no specific preferences.

The study shows that the use of credit cards, debit cards (known as a 'bancomat' in Italy) and prepaid cards is increasing, partly thanks to the rise in online payments which, between 2022 and 2024, increased from 28 to 36 per cent of the total value of payments.

Cash remains the most frequently used payment method in stores, accounting for 52 per cent of total payments. In terms of value, however, cards are the most used payment method with a share of 45 per cent, followed by cash (39 per cent) and mobile apps (7 per cent). This is the result of a significant change over the years: in 2016, €39 out of every €100 were paid by card and €54 out of every €100 in cash!

Consumers say that cards offer several advantages, such as not needing to carry cash with them, not needing to check the change, and being better able to keep track of their expenses.

Payment cards remain the most used instrument for online payments, where €47 out of every €100 are transferred by cards, €26 euros out of every €100 with mobile phone apps and PayPal, while €13 out of every €100 are transferred via bank transfers, of which €4 through instant bank transfers.

Direct debits account for most of recurring payments, i.e. payments that are made at regular intervals, such as mortgage payments, insurance premiums or electricity and telephone bills.

The study on the payment habits of consumers in the euro area provides data that are the average of the data from the twenty nations. The averages hide some differences, however; in Italy, payments in cash prevail in person-to-person payments and in shops. In shops, cash is the main payment instrument both in terms of value (€49 out of every €100 compared with €39 euros out of every €100 in the euro area) and in terms of number of payments (61% compared with 52% in the euro area).

In an increasingly digital world, is the role of cash at risk of becoming marginal?

The answer is no. Despite declaring a preference for cards and other digital payment instruments, most consumers still want the option of using cash as a payment alternative.

Consumers believe that cash payments offer some advantages: transactions are not tracked and therefore do not pose privacy risks; people are more aware of their spending, as taking banknotes out of our pocket gives us a better idea of how much we are actually paying; and banknotes are accepted almost everywhere. Finally, we are all able to pay in cash, but not everyone is able to use digital tools easily; as a matter of fact, one in ten people report needing help with digital payments.

Although cash payments have been decreasing for years, they remain the most frequently used in shops and they are actually preferred for low-value purchases. Cash also remains widely used for person-to-person payments, such as pocket money for children or any exchange of money between relatives and friends.

In brief

While some prefer the simplicity of cash, some opt for the speed and convenience of cards and others experiment with relatively new payment tools such as instant transfers and mobile apps.

There are some occasions where we cannot choose. Some 24 per cent of euro-area consumers declared that their preferred payment instrument had not been accepted at least once in the month before the interview.

The possibility of choosing therefore remains crucial. Having various options actually allows us to use the most suitable solution in every single situation or simply the tool we are more familiar with or that we have at our disposal. Last but not least, variety ensures that we will always be able to make payments for any type of purchase, regardless of where we are in the euro area.