One Third Happy to Ditch Cash as Europe Looks to Digital Future

(Bloomberg) -- Cash may still be king for most Europeans, but more than one in three would be happy to abandon it altogether.

Twenty-one percent of people already rarely carry physical notes or coins, with 1 percent saying they haven't needed to for at least year, according to a survey of almost 15,000 people by ING published Wednesday. More than half of respondents said they used less cash over the last year and the majority of those expect to use it even less in the next.

The future of money has come increasingly under the spotlight as the development of cashless payment systems, peer-to-peer lending and digital money has coincided with an upsurge in interest from central banks, including on ways to improve their policy transmission.

“A cashless society is not only possible but could be accepted by at least part of the population in many European nations,” researchers led by senior economist Ian Bright said.

But he added there's a “gulf” between those switching how they pay and those who are sticking with notes and coins. In the survey, 82 percent of who did not use less cash the previous year said they don't plan to reduce usage in the coming 12 months either.

While half of those surveyed were confident they could manage without cash for at least a week, and 29 percent said they could do without indefinitely, about three quarters of Europeans say they'll never completely give up on hard currency. In the U.K. -- hoping to exploit its reputation as a hothouse for fintech development after it leaves the EU -- respondents were the least willing to go cashless.

The ING economists also looked at the impact of eliminating high denomination notes, which have met with increasing criticism. The European Central Bank is discontinuing the 500-euro note to crack down on crime, despite concerns such a move might undermine citizens' trust in cash, and Harvard Professor Kenneth Rogoff has suggested the U.S. abolish its $50 and $100 bills.

Only 6 percent of Europeans said getting rid of their highest value note would affect their finances, with Turkey proving the most attached to big bills, at 15 percent. That compares with 18 percent in the U.S.

To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net.

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Fergal O'Brien, Brian Swint