Published: 21.03.2019

Everyone makes payments on a daily basis, while development of technologies and financial services as well as changes in regulatory frameworks make the payments area very dynamic and the main focus of both experts and the public. Latvijas Banka in its capacity as payment infrastructure operator places the "Payment Radar", a new instrument for analysing trends in and providing a quick overview of the use of non-cash and cash, at the disposal of the interested parties.

The above overview, containing information on money usage habits of Latvia's population, entrepreneurs and the general public, will be published semi-annually and available on Latvijas Banka's website (https://www.bank.lv/en/topics/payment-radar). Development of the proportion and interaction between non-cash and cash payments will be the central measurement of the Radar supplemented by more detailed numerical information and experts' commentaries.

The March edition of the "Payment Radar" provides information on:

– the proportion between cash and non-cash settlement executed by one inhabitant of Latvia (currently cash and non-cash payments constitute 37% and 63% of the total number of payments respectively) and how this indicator has developed over the past years;

– the average number of payments made by one inhabitant of Latvia within a week (4.8 cash payments and 8.3 non-cash payments);

– the volume and value of non-cash payments (251.8 million payments amounting to 98.3 billion euro were made in the second half of 2018);

– the structure of non-cash payments (more than 60% of payments are executed with payment cards);

– recent developments in the instant payments area (the number of instant payments reached 1.6 million in the second half of 2018) as well as the population's opinion on this modern type of payments (the number of people using the advantages provided by instant payments in the 24/7/365 regime has increased substantially over a year, i.e. 2.5 times);

– latest trends in the use of cash, including the population's viewpoint on the necessity of small denomination coins (51% of the population consider that 1 and 2 cent coins should remain in circulation, but 28% support their withdrawal from circulation).

The "Payment Radar" employs the results of the population survey carried out by a market and social research agency Latvijas Fakti in February and March 2019. Aigars Freimanis, Director of Latvijas Fakti, Deniss Fiļipovs, Head of the Payment Systems Policy Division of Latvijas Banka, and Jānis Blūms, Member of the Board and Head of the Cash Department of Latvijas Banka, have commented on the recent trends in the development of non-cash and cash use.

"The economically active part of Latvia's society is open to new technologies, masters them and appreciates their benefits. The proportion of non-cash settlement continues to elevate and currently exceeds the traditional settlement in cash. However, it is wrong to claim that non-cash settlement could naturally outrival cash payments," says Aigars Freimanis in the first issue of the "Payment Radar". For more expanded sociologist's commentary, see https://www.bank.lv/en/topics/payment-radar.

"Instant payments paint a good picture of what modern services provided by the financial sector should be like. The 21st century consumer expects any service to be available online, here and now. Payment of an invoice, purchase or transfer of funds to a friend's or relative's account can be made at all hours of the day and night from any place with internet access. It only takes a couple of clicks and seconds for the money to reach the recipient," this is how Deniss Fiļipovs describes the modern trends in the payments field (for more details, see https://www.bank.lv/en/topics/payment-radar).

"In the euro area as a whole, cash is the most popular payment instrument in terms of the number of payments made at points of sale and in terms of settlement involving small amounts up to 45 euro. Technological development contributes to the popularity of non-cash payments; however, the transition process is very gradual. In our opinion, cash is one of the most important payment instruments used by the population, and it has specific advantages," stresses Jānis Blūms, Board Member of Latvijas Banka and Head of the Cash Department of Latvijas Banka (for more details, see https://www.bank.lv/en/topics/payment-radar).