Modern Retail Payments: Card Vs. Cash
Increase in Retail Transactions Via Card Payments, According to Recent Studies - Research Findings: Retail Sector Witnesses Persistent Increase in Card Transactions
The tides are changing in retail as card payments are dominating, accounting for approximately 63.5% of total retail sales in 2024, a noteworthy rise of 1.7 percentage points from the previous year [1]. Conversely, the manageable cashew share has shrank to 33.8%. The remaining chunk is mainly attributable to financing, invoice purchases, vouchers, and the like.
It is worth mentioning that when quantifying transactions, the humble dollar bill is still the preferred payment method by some, with cash being used in more than half of the approximately 20 billion transactions in 2024 (54.6%). Despite this, the drop in physical shopping exchanges during the pandemic caused the number of brick-and-mortar transactions to plunge to as low as 16.6 billion [1]. In 2024, retail purchases have returned to pre-pandemic levels, with card payments leading the charge, accounting for over 44% of transactions [1].
The leader of card payments continues to be the Girocard [1]. Notably, mobile payments via smartphone or smartwatch have witnessed a considerable upsurge, with over one in eight (12.9%) of all card-based transactions now handled digitally [1][3]. This figure represents a significant increase compared to the previous year's 7.5% [3].
The Rise of Mobile Payments
The study also highlights that the use of smartphone and smartwatch-based mobile payments (like Apple Pay or Google Pay) increased once again in 2024 [1]. This method now claims a considerable 12.9% share of all card-based transactions, a major leap from the 7.5% seen the year before [3].
Consumers are using cash withdrawals at the checkout more frequently as well, with a 10% increase in the total volume of withdrawals compared to the previous year, amounting to 13.57 billion euros [1].
The information presented here has been drawn from the EHI study, which analyzed data from a whopping 499 businesses, representing around 100,000 commercial entities from 35 sectors with an impressive gross turnover of 314.8 billion euros [1].
So, cash or card? The answer lies in the modern consumer's hand.
- Card Payments
- Retail
- Coronavirus
- Mobile Payments
Enrichment Data:
An Insight into Today's Payment Landscape
Recent insights demonstrate card payments presently account for roughly two-thirds of retail sales, revealing an undeniable shift in customer habits. More specifically, international debit cards (such as Visa or Mastercard) have seen a growth of 2.8 percentage points, securing 6.9% of sales, while credit card usage has experienced a minor decrease to 8.3% [2]. Together, these digital options now sum to 15.2% of physical retail sales [2].
It comes as no surprise then that mobile payments (Apple Pay, Google Pay, etc.) have experienced a significant surge, constituting 5.7% of all in-store payments and 12.9% of non-cash transactions, rising from 7.5% the preceding year [2].
Influence of the Coronavirus Pandemic
The pandemic gave a remarkable push to the adoption of contactless and digital payment methods, driven by hygiene concerns and the preference for minimal physical interaction [5]. As a result, contactless payments now account for 50% of all in-person transactions and up to 77% of cashless sales in self-service retail [5]. The impact of this shift has persisted even beyond the pandemic, with mobile and card payments becoming the norm in many retail environments [4][5].
Trend Predictions
- Mobile payments and digital wallets are projected to continue their impressive growth, with retailers rolling out digital options alongside traditional cash options [3][4].
- Micro markets and vending machines are estimated to see an 8% (vending machines) to 40% (micro markets) sales growth in 2025, mainly due to the acceptance of cashless payments [5].
- Card payments—especially contactless and mobile-enabled— are expected to continue their steady expansion, while credit card usage may stabilize or witness a slight decline as debit and mobile payments surge [3][5].
Essence
Debit and digital payments are ascending in retail, surpassing cash in many situations—a trend that the pandemic has accelerated significantly. Despite the persistent popularity of cash, the convenience and security of digital and contactless payments are compelling factors driving this long-term shift in spending practices [3][5].
- In 2024, over 63.5% of total retail sales were made using card payments, a noteworthy increase from the previous year.
- Cash withdrawals at checkout have increased by 10%, amounting to €13.57 billion in 2024, due in part to concerns about hygiene caused by the coronavirus pandemic.
- Mobile payments, such as Apple Pay or Google Pay, experienced a significant increase in 2024, accounting for 12.9% of all card-based transactions.
- The pandemic expedited the shift towards digital and contactless payments in retail, with contactless payments now accounting for 50% of all in-person transactions and up to 77% of cashless sales in self-service retail.
