In shops, the preferred means of payment for consumers in Luxembourg is still cash. According to the European survey "Space", conducted in 2019 and featured in the latest bulletin of the Banque centrale du Luxembourg (BCL), 54% of transactions at point of sale were made in cash in the Grand Duchy. This figure rises to 73% in the euro area.
The average cash payment in shops in Luxembourg was €21.7, compared with €8.9 in Portugal.
Another interesting fact is that residents appreciate having cash in their pockets with at least one high denomination banknote, i.e. a €100 or €200 note. According to the European survey, 64% of residents in Luxembourg have at least one €100 note in their wallet, and 25% at least one €200 note. Only the Austrians and the Slovaks surpass the Luxembourgers, with 79% and 70% of residents having at least one €100 note in their pocket.
Closer to home, the French clearly do not like to have high-denomination banknotes in their pockets, since only 16% of them have a €100 note and 4% a €200 note. It should be noted that the use of cheques is still widespread in France. In Belgium, 34% of people have at least one €100 note in their wallet, and 11% at least one €200 note.
On the other hand, when it comes to paying bills, Luxembourg residents prefer bank transfers (46% of transactions) compared with only 20% of Europeans. The trend is reversed when it comes to direct debit, since 41% of Europeans pay their bills by this means, compared with 27% in Luxembourg.
More generally, cash is still the most widely used means of payment in Luxembourg. However, since 2016, bank cards and other payment instruments have shown an upward trend, according to the BCL.
Covid has changed habits
The covid-19 pandemic appears to have contributed to a decline in the use of cash, at least by some consumers. In order to quantify the extent of this change in the euro area, the ECB conducted a separate survey during July 2020, entitled "Impact". Of the respondents, 40% in the euro area and 49% in Luxembourg said that they had used less cash since the start of the pandemic.
In the euro area, 87% of these people said that after the health crisis, they would certainly or probably continue to pay less often in cash. In Luxembourg, this percentage is 82%.
When asked about their last payment, the majority of participants in Luxembourg said they had paid by card: 47% had used contactless technology, while only 18% had paid in cash.
However, the survey is very different from the "Space" survey. Indeed, only 17,779 people were surveyed in the euro area, including 500 in Luxembourg. In addition, the survey only covered the last payment made. It will therefore be important to see whether these trends continue in the future. To this end, the government has decided to conduct a survey on payment habits every two years, with the aim of publishing the next results at the end of 2022.
This article was originally published in French on Paperjam. It has been translated and edited for Delano.