A new report released by the European Central Bank (ECB) analyses the social and private costs of making retail payments in 13 European countries and discovers that they are substantial, amounting to around €45 billion, or almost 1% of their combined GDP. If extrapolated to cover the 27 Member States of the European Union (EU), these costs would be around €130 billion.
“This study is a true joint venture of the ECB and the national central banks involved,” said Benoît Cœuré, Member of the ECB’s Executive Board. “Its results underline how much retail payment services matter for European society and in the economy as a whole. The study will shed light on the debate about how the European market for payment services will look in the future and how overall cost efficiency can be improved even further.”
The study finds that cash payments account for nearly half of the total costs. As the most commonly used payment instrument, cash has, on average, the lowest social costs per transaction, at €0,42, closely followed by debit cards with costs of €0,70 to society.