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In Europe, cash still dominates at the POS

Cash still dominates at the point of sale in Europe, accounting for more than three quarters of all in store transactions in the euro area last year, according to an ECB study.

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Despite the hype surrounding contactless cards and mobile wallets, 79% of transactions at the point of sale were carried out using cash last year, amounting to 54% of the total value of payments. In contrast, cards were used for just 19% of transactions and made up 39% of the value of payments.

The data shows a geographical divide: southern euro area countries, as well as Germany and Austria, made more than 80% of POS payments with cash in 2016, while Northern nations such as the Netherlands, Estonia and Finland saw cash usage around the 50% mark.

Men tend to use cash more than women and the older more than the younger, although there is no difference between levels of education.

The high levels of cash usage comes despite the fact that most people say that they prefer to pay by card. The ECB suggests that this contradiction may be explained by the fact that nearly two thirds of payments are under EUR15 and contactless transactions are still fairly rare in many countries.

This leaves open the possibility that cash really could fall out of favour in the near future as contactless cards and the likes of Apple Pay and Android Pay pick up, something that has already been seen to some extent in the UK and Australia.

Finally, the study also shows that cash is still used as a store of value, with almost a quarter of people in the euro zone keeping some at home as a precautionary reserve.

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