Europe Phases Out Cash? One in Three Ready for Digital Euro

By Gloria Methri

Cash payments are losing ground across Europe as digital alternatives gain momentum, marking a major shift in consumer behaviour. The latest European Payment Study by BearingPoint reveals that while cash remains dominant in German-speaking countries, accounting for 69% of transactions in Germany, 73% in Austria, and 57% in Switzerland, its overall usage is steadily declining.

Meanwhile, awareness and potential adoption of the digital euro are on the rise, with one in three Europeans ready to embrace central bank digital currency (CBDC) in their daily transactions.

Cash Declines, But Regional Differences Persist

Despite a general decrease in cash transactions, German-speaking countries continue to favour physical currency. Meanwhile, countries like Sweden and Denmark have embraced digital alternatives, with cash accounting for less than a third of transactions. This contrast highlights the varied pace of payment evolution across Europe.

The study reveals that two-thirds of Europeans are aware of the digital euro, with an exceptionally high familiarity in eurozone countries. However, in non-Euro nations like Sweden, Denmark, and Switzerland, awareness remains lower, with four out of ten respondents unfamiliar with central bank digital currencies (CBDCs). Most respondents view the digital euro as an addition to existing payment options rather than a replacement.

1 in 3 Europeans Ready to Use Digital Euro

A significant 33% of respondents indicated they would use the digital euro, with 20% prepared to use it multiple times per week. Interestingly, support is higher in countries where cash is still prevalent, reinforcing the idea that digital cash alternatives are appealing to those reliant on physical currency. In contrast, Sweden and Denmark exhibit lower enthusiasm, with only one in four respondents willing to use a CBDC and fewer than 10% ready for frequent transactions.

37% of respondents cite online shopping as the top potential use case for the digital euro. Ireland leads the trend (48%), followed by Austria (42%) and Germany (38%). Sweden records the lowest interest in using digital euros for e-commerce, at 26%.

In-store shopping is the second-most everyday use case (28%), while peer-to-peer transfers are most favoured in Ireland (36%) and Finland (34%).

Banks enjoy a significant trust advantage when handling digital euro transaction data, with 55% of respondents preferring them over technology companies like Apple, Google, and Amazon, which received just 5% support.

Christian Bruck, Partner at BearingPoint, stated, “The decline in cash usage and the growing acceptance of the digital euro indicate an important shift in payment habits across Europe. With one in three people ready to use it, this payment method holds significant potential.”

Dr Robert Bosch, Global Leader of Banking & Capital Markets at BearingPoint, emphasised that banks should leverage their strong position in consumer trust to drive the adoption of the digital euro.

As Europe continues its digital payment transformation, the decline of cash and the rise of the digital euro will play a pivotal role in shaping the financial landscape. However, with stark regional differences, a tailored approach may be necessary for widespread adoption.