7 nations leading the way to a cashless society are in Europe. Do you live in one?

One of the more unexpected effects of the world’s battle with Covid has been the way we pay for the things we buy.

According to media reports, Europe’s trend of using cashless payment for goods rose during lockdown, with Visa recently hitting its one billionth contactless transaction.

Yet many European nations were already well on the way towards being “cashless” before coronavirus. German media group DW reports that, in 2018, more than half of sales (56%) in stores, hotels and bars were contactless. Nowadays in Sweden, 82% of people make payments without cash.

Against this backdrop, it’s hardly surprising that seven European nations feature in the world’s top 15 countries moving towards becoming cashless. Read on to discover which 7 of our EU neighbours are leading the way in potentially becoming cashless, and what the advantages and disadvantages of doing so might be.

Cashless means shopping is quicker and more convenient

With apps like PayPal and Venmo, paying for goods is extremely convenient nowadays. Using your debit card or mobile phone app is quick and easy, and you don’t have to count out the correct amount in cash and wait for your change to be handed back to you.

But the advantage of going cashless isn’t just convenience for consumers; it’s also better for businesses. No longer do they have to count cash at the end of the day, or spend time depositing it into banks.

In a world where Covid remains a concern, the fact that cashless is more hygienic is also a positive. Unless the cashpoint gives you a brand-new note, cash may have been handled by countless others before you, helping viruses and bacteria to spread.

Cashless may make it harder to keep track of spending

But it may not all be good news. According to payment service provider Corepay, there may be some who may struggle to budget properly when they are not using cash, as they lose track of spending and find it difficult to save.

Another disadvantage could be technical glitches, which means a retailer or service provider cannot take payment. This could prevent you from buying goods or services when you need them or, if you are a company owner, result in you losing business.

In its report, DW points out that concerns have been raised around data protection, especially where mobile devices are used, as they may not be as well protected against hackers. It adds that payment apps also allow companies to track where you shop, something you may feel uncomfortable with.

A cashless society might mean reduced crime

That said, going cashless might help to reduce crime as the ability to track electronic payments makes it much more difficult for criminals to launder money.

And the advantages of going cashless may go further, Corepay adds, as a cashless society means you won’t be carrying cash that can be stolen by thieves. Without the ability to steal tangible money, there may be a reduction in crime, it explains.

The Corepay report goes on to add that, if you only have one bank account and it’s hacked, you probably won’t have any additional funds to live off while it’s being sorted. For that reason, ensure you bank with more than one bank and always remain alert against cowboy scammers looking to steal your money.

This is something our recent blog 5 scams criminals use to steal your money, and effective ways to protect yourself covers.

Europe is heading towards being cashless, and these countries are leading the way

According to a recent report by Money, experts believe that some societies will be cashless in just five years. Of the first 15 countries predicted to become cashless, seven are in Europe. So read on to find out if you’re living in one of them.

• Norway: currently ahead of other European countries, with 98% of Norwegians owning a debit card. According to estimates by Norges Bank, only 3-4% of transactions in the nation use cash.

• Switzerland: two-thirds of its population now own a credit card, and it has one of the highest contactless payment limits of around €73.

• Finland: According to recent figures, 98% of Finns own a debit card, with nearly two in every three citizens (63%) owning a credit card.

• United Kingdom: With 9 out of 10 people owning a debit card, and two-thirds of people having a credit card, the UK is well on its way to becoming cashless.

• Sweden: currently there are less than 32 ATMs per 100,000 people, and nearly all its population (98%) has a debit card.

• Denmark: like its neighbours Norway and Finland, nearly everyone in the country now has a debit card, with ownership standing at 97%.

• Netherlands: recent reports show its citizens are world leaders in debit card usage, with 99 out of every 100 people owning one.

Cashless does not mean credit

While much of northern Europe is embracing cashless transactions, it’s worth remembering many people still prefer to spend money that’s in their bank account and not rely on credit cards.

It can be a surprise for those who have just arrived into northern Europe to learn many stores, including supermarkets, cafes and some restaurants, don’t take credit cards.

That said, it’s typically a financially healthier way to live, notwithstanding managing and keeping track of your cashless transactions.

That’s not to say credit cards do not have a place. They are available from most banks and tend to have lower limits in the EU so that they can be used for special purchases where a debit transaction cannot always be done.

This might be for airline tickets, for example. Always try to clear the amount you’ve spent on the credit card as quickly as possible to avoid interest being charged.

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We hope you found this blog useful. If you would like to discuss your financial situation or have any questions about investments, feel free to contact us at info@extinvestments.com and we’ll be happy to help.

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This article is for information only. Please do not act based on anything you might read in this article.