An Estonian central bank official has said commercial banks should come back down to earth instead of trying to write a premature obituary for cash.
Madis Müller, a deputy governor at the Bank of Estonia, said it was wrong to see cash and electronic methods of payment as opposites. He said that cash use would decrease but that it would not disappear anytime soon.
Müller told ETV that people didn't realize the magnitude of the expenses that the central bank, commercial banks and merchants faced in handling cash.
"But I think it is wrong to say that one method of payment is more preferred over another. Certainly cash is preferable in certain situations. Yet naturally the trend is more toward card payments and this will continue."
Speaking on the same panel, SEB board member Eerika Vaikmäe-Koit said she agreed that it was expensive and maintained that the amount of cash in circulation should be reduced.
"If we look at how much it costs us to keep cash in circulation, it's about 1.5 percent of GDP. That means 255 million euros in Estonia - 200 euros per person per year. The costs are distributed more or less equally between central bank, commercial banks, merchants and consumers."