Share of cash payments at the point of sale falls to 45%

In 2016, consumers paid for 45% of their purchases at shops, petrol stations, restaurants, cafés and other venues in cash. As in the two preceding years, cash use fell considerably. Since 2015, consumers have paid for more purchases by debit card than in cash. Debit card payments now account for 54.5% of all payments. The share of credit card payments has remained stable at 0.5% for several years. These findings come from joint research by the Dutch Payments Association and De Nederlandsche Bank into cash and debit card use in the Netherlands in 2016 (factsheet in Dutch).

Fewer cash payments

Between 2015 and 2016, the number of cash payments made by consumers at the point of sale fell from 3.19 billion to 2.95 billion. Their total value declined from €40 billion to €38 billion. Consumers are increasingly paying for purchases by debit card. The number of debit card payments rose from 3.23 billion to 3.57 billion, while their total value increased from €93 billion to €97 billion. Consumers are increasingly choosing contactless payments with their debit card or mobile phone. The rise of contactless payments is helping to sustain the growth in debit card payments.

Teenagers catching up on debit card use

On average, consumers pay for purchases by debit card more often than in cash, but this is not true for every demographic group. Teenagers aged 12 to 18, people aged 65 and over, and people with lower levels of education often pay in cash. Teenagers did use debit cards more frequently than the previous year. Together with young adults aged 19 to 24, who are the most enthusiastic debit card users, they showed the strongest growth at 7 percentage points. Older people and people with lower levels of education showed strong growth in debit card use last year, but their growth was limited this year.

Debit card payments are gaining ground on cash payments in every sector. The largest shifts are visible in vending-machine sales at 8 percentage points and the hospitality sector at 7 percentage points. Leisure, culture and entertainment at 6 percentage points and street sales at 5 percentage points – two sectors where cash has traditionally been widely used – also saw strong growth in debit card payments in 2016.

Consumers increasingly pay as they prefer

Consumers are increasingly able to use their preferred payment method. This is true both for people who want to pay in cash and those who prefer debit cards. Consumers who paid in cash when they would have preferred to use a debit card did so because debit cards were not accepted or the payment terminal was not working. They encounter fewer barriers than six years ago because debit cards are accepted at more venues and there are fewer disruptions. People who paid by debit card but would have preferred cash say they had no or insufficient cash with them, or that cash payments were not accepted.

Although various venues now accept only debit card payments, this has not led to greater inconvenience in payments. The proportion of people who prefer cash but are unable to pay that way has remained stable since 2012.

More debit card payments for security and efficiency

Banks and merchant organisations concluded the Payment System Covenant in 2005. By encouraging debit card use and reducing cash use, both parties aim to improve the security and efficiency of payments. In 2014, they set a target for consumers to pay for 60% of purchases by debit card and 40% in cash by the end of 2018. Given the current debit card-to-cash ratio and the trend towards paying for more purchases by debit card, it is reasonable to expect that they will meet this target. Although cash use is declining, the National Forum on the Payment System believes that cash should continue to function effectively as a payment method for both consumers and retailers. This safeguards the accessibility and financial stability of payments.

All findings from the joint research by De Nederlandsche Bank and the Dutch Payments Association into the use of cash and contactless and other debit card payments in the Netherlands in 2016 are presented in the factsheet ‘Payments at the point of sale, 2016’ (in Dutch). The factsheet provides information about cash and debit card use in general and by transaction amount, sector and demographic characteristics. It also covers seasonal patterns in payment behaviour, contactless payments and how much cash consumers carry.