A tale of transactions: An analysis of retail payments in the euro area

Abstract

This paper provides a data-driven analysis of retail payment behaviour in the euro area, with the aim of informing debate on a possible holding limit for a digital euro. Using data from the European Central Bank (ECB) SPACE 2024 study and the ECB Data Portal, it compares average transaction values for cash, debit cards and e-money across member states, and examines how each payment method is used in everyday practice. The findings reveal that cash usage, while declining in frequency, remains important in retail payments. The average cash transaction value stands at €13.50, but consumers still carry an average of €59 in their wallets and withdraw nearly an average €195 per ATM transaction. This suggests that cash is used both for small purchases and as a form of backup liquidity. There remain significant differences between countries, reflecting cultural preferences and differing levels of digital payment adoption. Importantly, the data show no clear link between cash usage patterns and the size of the shadow economy. Debit cards are the dominant retail payment instrument, with average transaction values falling to €34.82 in 2024, underscoring their increasing importance for everyday spending. Analysis by merchant category highlights a clear split between frequent, low-value payments (such as groceries and restaurants) and less frequent, high-value purchases (such as travel and durable goods). E-money plays a limited role. More than 85 per cent of euro-area e-money transactions take place in just two countries, reflecting market structure rather than widespread consumer use. Finally, the paper shows that changes in payment habits tend to be slow, and that if private instant-payment solutions spread widely before a digital euro is introduced, it is unclear whether a digital euro would replace existing payments. This article is also included in the Business & Management Collection which can be accessed at http://hstalks/business.