Study on the payment attitudes of consumers in the euro area (ECB)
The European Central Bank (ECB) published its latest study on the payment attitudes of consumers in the euro area (SPACE), which looks at the payment habits of consumers in euro area countries. It finds that cash remains the payment method used most frequently in shops, although its use is declining. The share of digital payments continues to increase, but at a slower pace, with cards still being the most popular method. The share of mobile apps is on the rise. Over half of euro area consumers prefer to use cards and other digital payment methods. However, a majority of consumers consider it important to have the option to pay with cash. [Read more at the ECB]
CBDC in the market for payments at the point of sale (BOC)
The Bank of Canada (BOC) published a paper that investigates the introduction of a retail central bank digital currency (CBDC) into the market for payments. Focusing on the point of sale (POS), it develops and estimates a structural model of consumer adoption, merchant acceptance and usage decisions. It counterfactually simulates the introduction of a CBDC, considering a version with debit-like characteristics and one encompassing the best of cash and debit, and characterize outcomes for a range of potential adoption frictions. It shows that, in the absence of adoption frictions, CBDC has the potential for material consumer adoption and merchant acceptance, along with moderate POS usage. However, modest adoption frictions substantially reduce outcomes along all three dimensions. Incumbent responses required to restore pre-CBDC market shares are moderate to small and further reduce the market penetration of CBDC. Overall, this implies that an introduction of retail CBDC into the market for payments is by no means guaranteed to be successful. [Read more at the BOC]
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Upcoming Speaking Engagements:
- Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]
And just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at john@kiffmeister.com.
