Estonians Spend More Abroad and Online
Compared to July 2010, the use of banking cards issued by Estonian banks has increased by 23 percent abroad and by 11 percent in Estonia. The average amount of a card transaction made abroad is 154 euros.
"New services, whether they be phone calls or online entertainment services, have influenced the consumers' buying behavior and choices and led to an increase in the amounts of money paid to foreign bank accounts. As a result, the 57 million euro turnover generated by the transactions made in stores abroad, on trips, or online made up 10 percent of all the card payments and cash withdrawals made by Estonian residents in July," said Mananger of Swedbank's Institute of Private Finances Piret Suitsu.
"Although businesses and the Estonians living and working abroad contributed some of it, the total amount is so great that we can conclude that Estonians have started to travel more often and spend a little bit more," Suitsu argued.
"At the same time, a lot of payments and cash withdrawals were made in Estonia using cards issued abroad: Estonian businesses and service providers catering to tourists and Estonian nationals working abroad and vacationing at home generated a turnover of 68 million euros in July, which is a record for the last couple of years," said Suitsu.
The money spent by Estonian bank account owners on trips abroad increased by 47 percent compared to the first quarter of 2010. Most of it was spent on accommodation and food. Compared to last year, such expenses have tripled, amounting to 95 euros on average.
In addition to the use of banking cards abroad, the number of online and mail order purchases has also started to increase. Compared to last year, people spent over 25 percent more money on online purchases during the first quarter of the year.
"On the one hand, using the internet to make purchases makes a lot of sense: the selection is usually greater, the prices are lower, and the customer saves the time and effort spent on wandering the aisles in a physical store," said Suitsu, stressing that on the other hand, it is important not to let the card data fall into the wrong hands when making payments online.
"There are a lot of internet stores, and often, we end up on the websites of unfamiliar merchants. In order to avoid scammers, it would be prudent to make online purchases on well-known websites that have been proven to be trustworthy. People should also look into the background of Estonian online stores by searching for additional information about them. When buying goods from online stores abroad, it would be sensible to use the services of a payment processor or the options offered by the banks, such as getting a virtual card or setting a password for a credit card, to increase security,“ said Suitsu.
As of June, Estonians own 1,396,909 debit cards, 17 percent of which are passive. 381,860 credit cards have been issued, nearly half of which - 42 percent - are passive. The number of credit cards in circulation has decreased by 62,000, or 14 percent, in the last two years. The number of deferred debit cards has decreased the most – by 35,831. The fixed payment credit card portfolio has also suffered a 39 percent loss.