In a world that increasingly prioritizes digital transactions, the Nordic countries are setting the benchmark for cashless societies. According to a recent analysis by Finansplassen, a Norwegian finance information site, nations like Norway, Denmark, and Finland are spearheading this shift, while Armenia, Georgia, and Germany lag behind.
Finansplassen’s analysis, based on data from the World Bank, Eurostat, and other sources, evaluated European countries on their readiness for a cashless economy. Metrics included the number of ATMs and payment terminals per 100,000 people, contactless card spending limits, and the percentage of the population engaged in online banking.
Why the Nordics Dominate the Rankings
Norway emerged as the most prepared country for a cashless future, with only a minimal number of ATMs and a staggering 96% of its population using online banking. Finland and Denmark followed closely, showcasing robust infrastructures with widespread adoption of digital payment solutions.
Experts attribute the Nordic countries' success to a combination of factors:
Sparse Population Density and Harsh Climates: Digital payments eliminate the logistical challenges posed by these geographical constraints.
High Trust in Institutions: Small, cohesive populations foster trust in public policies and technological advancements.
Mobile Wallets: Platforms like Vipps MobilePay, popular in Norway, Denmark, and Finland, enable seamless and user-friendly transactions, gaining millions of users since their inception in 2015.
Related: China's Digital Yuan Hits a Snag: Users Cashing Out for Cold Hard Cash
Cash’s Continued Relevance
Despite their strides in digital payments, Nordic countries acknowledge the continued importance of cash. Norway's government has recently introduced measures to ensure cash remains accessible, citing its role in societal preparedness during digital outages or emergencies.
Emilie Enger Mehl, Norway’s Minister for Justice and Emergency, emphasized that “cash is an important preparedness for society,” especially in the face of digital vulnerabilities. Denmark echoes this sentiment, with cash payments still constituting 8% of transactions as of 2023.
Lagging Behind: Armenia, Georgia, and Germany
In stark contrast to the Nordic countries, Armenia, Georgia, and Germany remain less equipped to transition to cashless systems. These nations feature fewer payment terminals and higher reliance on cash transactions, underscoring the need for greater infrastructural and cultural adaptation.
The Pandemic’s Role in Accelerating Digital Payments
Globally, the COVID-19 pandemic significantly boosted cashless payments. The World Bank reported an increase from 91 to 135 cashless transactions per person annually between 2017 and 2020. In Europe, the share of cash transactions dropped from 72% in 2019 to 59% in 2022, as consumers embraced the convenience of digital options.
While cashless payments continue to grow, the European Central Bank highlights that 60% of Europeans still value having access to cash, ensuring its presence alongside digital solutions.
Source: Euronews
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