Published: 30.09.2024

The most recent (autumn 2024) "Payment radar" published by Latvijas Banka suggests that the ratio of non-cash payments to cash payments in Latvia was 77% to 23% in August 2024. The ratio has remained unchanged from February 2024, representing the largest-ever share of non-cash payments.

The "Payment radar" outlines the latest information on the money usage habits of the public in Latvia. This information has been obtained from the results of a public survey conducted by the market and social research agency SIA Latvijas Fakti.

The "Payment radar" is published semi-annually. The development of the ratio of non-cash payments to cash payments and interaction between them (as at August 2024) is the central measurement of the overview, supplemented by more detailed numerical information and expert commentaries.

Ratio of non-cash to cash payments

In August 2024, the prevalence of non-cash payments grew compared to August 2023. The ratio of non-cash to cash payments was 73% to 27% a year ago (77% to 23% six months ago, in February 2024, and 71% to 29% two years ago, in August 2022).

In August 2024, the average number of payments per capita in a week was 15.2 (compared to 17.1, 13.8, and 12.6 in February 2024, August 2023, and August 2022 respectively), including 11.7 non-cash payments and 3.5 cash payments.

Payment-related modern technologies

The "Payment radar" data suggest that the use of payment-related modern technologies has stabilised, with no significant changes observed over the past six months. The share of payments made with a contactless card has shrunk slightly, with 67% of the population using these payments daily in August 2024, down from 68% both in February 2024 and August 2023, while remaining higher than in August 2022 (66%). Furthermore, the share of payments made with a smart phone has also seen a moderate decline, with 22% of the population using these payments daily in August 2024, down from 23% in February 2024; however, this share remains higher than that recorded a year ago (19% in August 2023) and two years ago (14% in August 2022). In August 2024, 2% of the population used a smart watch to make their payments.

In August 2024, 35% of the population used instant payments on a daily basis, down from 41% in February 2024 and up from 31% in August 2022. Instant payments made by providing only the payee's mobile phone number have notably increased in popularity. In August 2024, 26% of the population used this option, while 49% were aware of it but had not yet used it. As a comparison, the share of the population making instant payments by providing only the payee's mobile phone number was 18% in February 2024, 20% in August 2023, and 24% in August 2022.

Providing access to financial services

In her commentary for the "Payment radar", Ilze Posuma, Member of the Council of Latvijas Banka, indicates that improving access to financial services for every resident across Latvia has been a priority for Latvijas Banka in recent years. The "Payment radar" suggests that despite the growing adoption of modern payment methods, a significant portion of society still relies on traditional solutions. For example, 31% of the population do not use contactless cards to make payments, while 33% do so infrequently – less than five times a week. 22% of the population use their smartphones to make payments on a daily basis. Older people and those living in the regions are less likely to use modern solutions. This underscores the significance of the priority set by Latvijas Banka, namely, ensuring wide-reaching access to cash and non-cash payment methods as well as availability of banking services across the country.

The latest developments in this area are the amendments to the Credit Institution Law which will facilitate the presence of banks in the regions and access to cash. The amendments will ensure a greater physical presence of banks in the regions. The amendments also establish the minimum requirements to ensure that bank customers are able to withdraw cash from their payment accounts. These include the requirements for the geographical distribution, number and minimum operating time of ATMs, as well as the limit on free cash withdrawals at ATMs.

"Latvijas Banka will continue to ensure that every resident of Latvia has access to the most convenient and common types of financial services and payment methods. Latvia's public has balanced habits in using money, and nothing suggests that this may change in the near future,"
notes Ilze Posuma.

Digital euro project continues with increased engagement from stakeholder groups

The digital euro project is currently in its preparation phase that will run until 31 October 2025. It aims to lay foundations for the potential issuance of a digital euro. Reinis Vecbaštiks, Modern Payments Expert of Latvijas Banka, reports that these preparations include the development of rules for the digital euro payment scheme and the selection of service providers capable of developing the infrastructure necessary for the digital euro. During this phase, the Eurosystem (the European Central Bank (ECB) and the national central banks of the euro area) is also conducting a broader technical analysis of the envisaged functionalities and technical aspects of the digital euro, such as its offline functionality.

To ensure that the public in Latvia is well-prepared for the introduction of the digital euro and to coordinate the project's progress in our country, Latvijas Banka has established the Latvian Digital Euro Forum. It brings together experts, companies, and representatives of the relevant institutions to gain insights into the progress of the digital euro project, its potential introduction, and contribution to the economy and society. It will also address the risks and discuss the regulation under development.

The first event of the Latvian Digital Euro Forum – a seminar organised by Latvijas Banka – was held on 25 September this year, featuring Evelien Witlox, Head of the ECB's digital euro project. She provided an in-depth overview of the digital euro project, its latest developments and the ECB's future plans.

Cash remains the most accepted means of payment in Europe

Zita Zariņa, Member of the Council of Latvijas Banka, reports that the ECB has released its latest Companies' Survey on Cash, a survey on the euro area companies' views on the use of cash. This is the second survey of its kind, and the results obtained have been compared with the data from the survey of 2021 when it was first conducted. The survey reaffirms what Latvijas Banka has already highlighted: cash has been, is and will remain an important means of payment, including in Latvia.

The survey revealed that cash is the most accepted means of payment in the euro area, with 88% of companies accepting cash payments. These are followed by payment cards and credit transfers, accepted by 85% and 78% of companies respectively. Among companies that accept cash payments, 94% expect to continue doing so for at least the next five years.

"A separate analysis of Latvia's indicators confirms, once again, that our society maintains balanced habits in using money, with both cash and non-cash payments playing important roles," highlights Zita Zariņa. 77% of Latvian companies accept cash payments and 73% – payment cards.

The survey conducted by SIA Latvijas Fakti in August 2024 shows that 86% of respondents are satisfied with the options available for withdrawing cash from their bank accounts, representing a 2 percentage point increase from the previous survey conducted in February 2024. This indicator has remained stable for several years since Latvijas Banka and the financial sector agreed on measures to preserve the ATM network across the territory of Latvia. The provisions, previously established in the form of a memorandum of cooperation, are now mandated by law.

Automatic coin deposit grows increasingly more popular

"Latvijas Banka's automatic coin deposit service introduced in early 2023 has become increasingly popular among both the general public and companies," notes Ģirts Jansons, Deputy Head of the Cash Department of Latvijas Banka.

In 2024, an average of 916 customers per month used the coin deposit service, compared to an average of 777 customers per month in 2023. In some months, the number of customers exceeded 1000. The number of deposited coins reached 9.1 million in the first eight months of this year, compared to 8.25 million coins in the first eight months of 2023. Latvijas Banka's forecasts suggest that the total number of coins deposited in 2024 will exceed 13 million.

These figures show that the residents appreciate the convenience and efficiency of the services provided by Latvijas Banka, as well as their speed: the funds are usually credited to the customer's bank account within a few seconds.

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