Bank of Estonia: People's payment habits largely unchanged, cash used less

The public transport systems in Tallinn and Tartu both accept touchless card payments.
The public transport systems in Tallinn and Tartu both accept touchless card payments. Source: Ridango

The payment habits of people in Estonia are largely fixed already, and although there have been no major changes in recent years, some identifiable trends nonetheless exist, Tiina Soosalu of the Bank of Estonia's Payment and Settlement Systems Department said at a presentation of the results of a survey of Estonian residents' financial behavior.

"The majority of the population most commonly pay for their everyday purchases with a bank card or in cash," Soosalu said according to a press release. "Around a tenth of people only use cash to pay for their purchases, and about the same number only ever use a bank card. Cash was used a lot more a decade ago, when more than half of people in Estonia paid only or mostly in cash for everyday purchases."

At 92 percent, the overwhelming majority of people's wages are paid to bank accounts, but according to the Bank of Estonia, 5 percent of people still receive their earnings in cash.

"The share of the population receiving their wages or pensions in cash has remained fairly unchanged over the past decade," Soosalu said. "The reason people receive their income in cash may be because it suits them or their employer better, or because they do not have a bank account."

Of those whose wages are deposited in their bank accounts, 93 percent use ATMs to withdraw cash. Lately, however, and in rural areas in particular, people have also begun utilizing cashback services at retail stores. This service is particularly popular in Southern Estonia, where some 12 percent of the population have used it, as well as in Western Estonia.

Martti Näksi, a specialist in cash handling at the Bank of Estonia, said that 32 percent of people in the country keep their savings in cash. Of these, 43 percent do so in order to maintain a clearer picture of their savings, 19 percent because interest rates on bank deposits are low, and 11 percent because bank service fees are too high.

Since 2015, however, the number of families who have money left over after paying for essentials and loan payments has gradually increased.

"Some 94 percent of people say that access to cash has remained unchanged or has improved, and over two thirds of the population say they have good or very good access to cash," Näksi said. "Only 1 percent say that their access to cash is poor or very poor."

Karin Reivart, research manager at Turu-uuringute AS, said that it's surprising that it is most often young people who are opposed to the idea of getting rid of one- and two-cent coins; almost half of the 18-24 age group is against it. In contrast, among the general population, just 31 percent were against getting rid of one- and two-cent coins.

"Young people are generally in favor of making payments as fast and simple as possible, but here the results directly contradict that," Reivart said.


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Editor: Aili Vahtla

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