Which European countries are most prepared to go cashless?

The Nordic countries are more prepared than the rest of Europe for a future in which cash is no longer used in transactions, a new analysis reveals. Finansplassen, a Norwegian financial information website, has compiled data from the World Bank, Eurostat and other publicly accessible sources to analyze the degree of adaptation of every European country to be able to pay without coins and bills.

They evaluated the number of ATMs and payment terminals available per 100,000 inhabitants, the limit how much cardholders could spend on contactless purchases and the number of people banking per year Internet.

Fewer ATMs means the country depends less of cash and a greater number of payment terminals means there is “greater infrastructure” for electronic transfers, according to a Finansplassen spokesperson. Their analysis shows that Norway is the most prepared country for a future without banknotes: it is one of those with the fewest ATMs and around 96% of the population performs banking operations online, according to the analysis.

Finland and Denmark They come in second and third place in the analysis because they have more ATMs than Norway and some fewer payment terminals, but approximately the same percentage of people use online banking. The Netherlands, Sweden, Iceland, Estonia, Lithuania, Cyprus and Switzerland complete the top 10 places of the analysis, while Armenia, Georgia and Germany are the less adapted to cashless systems.

Why are the Nordic countries so far ahead?

Olle Petterssonpersonal finance expert at Finansplassen, explains to ‘Euronews Next’ that Nordic countries in particular find cashless systems “useful” because these systems help overcome some of their challenges, such as low population density or the harsh weather conditions that make traditional payments a little difficult.

According to Pettersson, these countries also have an advantage in this regard: they have a great confidence in public institutions and their populations are smallmaking it easier to test new policies. In 2016, Norway’s largest bank, DNB, called for a move away from cash because it was concerned about illegal activitiessuch as money laundering, according to the ‘Independent’ newspaper.

At the same time, consumers flocked to Vipps MobilePaya “Nordic mobile wallet” that allows its customers to “send money as easy as sending a text message,” according to its website. Launched in 2015, Vipps MobilePay now reaches 11.5 million users in Norway, Finland and Denmark, the company says.

But recently, Norway has taken measures so that its citizens go back to cash. In October, Parliament approved changes to its Financial Arrangements Act that will make it easier for Norwegians pay cash if necessary.

“In a digital world, it can be easy to forget that there is a large group of people who are not digital,” Emilie Enger Mehl, Norwegian Minister of Justice and Emergencies, said at the time. “Cash is also important for society to be prepared.”

The Norwegian Directorate of Civil Protection (DSB) recommends Let everyone have some cash on hand due to the vulnerability of digital payment systems to cyberattacks.

“The world around us is increasingly turbulent, with wars, digital threats and climate change,” Mehl added. “We must be prepared for long-term power outages, system failures or digital attacks leading to outages in digital payment solutions.”

In Denmarkcash payments will represent only 8% of all transactions in the country in 2023, according to a document from the national bank. The Danes are more likely to use mobile payments because the buyer “always carries his cell phone with him” and can easily have the exact amount he needs to pay, according to the report. “Although the use of cash is decreasing, it is still necessary in society,” says Christian Kettel Thomsen, governor of the National Bank of Denmark.**

What has driven cashless payments?

The COVID-19 pandemic increased cashless payments worldwide, from an average of 91 per person per year in 2017 to about 135 in 2020, according to the World Bank.

He European Central Bank (ECB) noted a similar trend in Europe. A 2023 survey showed that 59% of transactions in 2022 were made in cash, up from 72% in 2019. The ECB says the change “cannot be determined” by a single factor, but suggests that “payment behaviors “learned during the pandemic have endured beyond restrictions.

Most consumers in Europe prefer pay with cards or other forms of cashless payment because it is more convenient, according to the survey. However, 60% of those surveyed stated that they wanted to be able to pay in cash.