Shift of cash to debit card continues

Share of cash payments at points of sale (POS) continues to fall

In 2019, the number of cash consumer payments made in shops, bars, restaurants, hotels, petrol stations, market stalls and to service providers fell from 2.53 billion (worth EUR 34 billion) to 2.28  billion (worth EUR 32 billion). Conversely, debit card payments went up from 4.28 billion (worth EUR 108 billion) to 4.70 billion (worth EUR 116 billion). Most of these payments – 3.02 billion – were contactless, with consumers using their debit cards or smartphones. The accelerated shift from cash to electronic payments is largely the result of cash-to-contactless substitution, especially for small amounts. Increasing numbers of consumers are paying contactless, and most of them use their debit card to do this. Surprisingly, just under a quarter of all consumers indicate they do not have a contactless debit card, whereas more than 90% of all debit cards are in fact contactless-enabled. This probably means that part of these consumers do not realise their debit card actually has the contactless feature.

Person-to-person (P2P) payments also show a shift from cash to electronic payments

In 2019, Dutch consumers made nearly 570 million P2P payments with a combined worth of EUR 23 billion. These include transactions between relatives, friends, colleagues and other acquaintances (485 million transactions) and for school and sports-related activities, such as presents for teachers and coaches or contributions for parties and events (82 million transactions). Of these payments, 54% were made in cash and 45% by electronic means, such as Tikkie or Betaalverzoek and via mobile banking transfers. Between 2018 and 2019, the share of cash fell by 5 percentage points, whereas that of electronic money transfers increased by 7 percentage points. Consumers in 2018 still made 59% of their P2P payments in cash, 38% electronically and 3% using other means such as gift cards. 

Young adults pay electronically most often

In 2019, young adults were least likely to use cash and were the most avid users of electronic means of payment compared to other age groups. Consumers aged 19 to 34 relatively made most debit card payments at POS terminals (Figure 2) and the 19 to 24-year-olds relatively made the most P2P payments by electronic means (Figure 3).

In 2019, consumers of all ages made debit card payments more often. Just as in 2018, teenagers showed the strongest growth in debit card usage in proportion to their total POS payments, which were up 10 percentage points. Older people also made debit card payments far more frequently, with the 55 to 74-year-olds showing the largest increase. As with teenagers, they particularly paid contactless more often. Those 75 years and over are the only ones paying cash (57% of purchases) more frequently than electronically (43%), although they also started shifting towards more debit card payments (up 2 percentage points).

For P2P payments, the increase in electronic money transfers is largest in the Netherlands for the age group 25 to 54 years (up 12 to 13 percentage points). In 2019, the 25 to 34-year-olds for the first time transferred more money to others electronically (58% of their P2P payments) than in cash (40%). Those aged 75 and over still do most of their P2P payments in cash, although they, too, increasingly pay electronically as well. For them, the share of electronic transactions almost doubled, from 7% in 2018 to 13% in 2019.

Coronavirus measures contribute to downward trend in the use of cash in 2020

The use of cash by Dutch consumers is likely to go down further in 2020. In addition to the ongoing digitalisation, the measures taken in the context of the coronavirus also play a role. For instance, consumers are urged to pay contactless more often in order to avoid contamination with the virus via skin contact with checkout staff. Banks have temporarily increased the limits for contactless payments, so that consumers do not need to enter their PIN codes quite as often. These measures mean that people who normally would pay in cash now pay by debit card   more often, either making contact or contactless payments. A first indication of this trend is the decline in the value of cash withdrawals from ATMs by around 30% over the past few weeks. The question is whether this shift will be of a permanent nature once the coronacrisis is over.

To read the full findings of the joint DNB and Dutch Payments Association study into the use of cash and electronic payments in the Netherlands in 2019, click on the link to the Dutch-language fact sheet “Betalen aan de kassa” (Point of sale payments in 2019). It contains data on the use of cash and electronic means of payment by Dutch consumers for POS and P2P transactions in general, as well as broken down by transaction amount, sector, purpose, demographics and month of the year.