Will Europe's Love for Cash Survive Instant Payments?

Cash is still king in Europe says a report by the European Central Bank. Will the introduction of instant payments change that? I explore the prospect following a recent trip to Santorini.

Just before Christmas, I was delighted to unwrap an early gift from an unlikely source: the European Central Bank. They had just released a fascinating study about how Europeans pay for things. The headline? Cash is still king.

?In fact, the ECB found that while cash is on the decline in general, Europeans still use it in more than half of point-of-sale payments. 52% were made using cash in 2024, down from 59% in 2022.

?To many city-dwellers, this likely came as a surprise. Ask anyone in London where the nearest ATM is, and I bet they’d struggle to tell you. These days, you can tap your way through tubes, cafes, and restaurants without giving cash or coins a second thought. In fact, a lot of places now only accept cards. And thanks to mobile wallets, I barely even use mine.

?But this is by no means the reality for much of Western Europe – as the ECB report highlighted.

Cash only

And as it turns out, I made a similar discovery on a bus in Santorini last year.

?After a relaxing stay in Oia—a painfully beautiful village in the northwest of the island—my husband and I decided to explore Fira, the bustling heart of Santorini. At the local bus stop, we waited in the warm morning sun. The bus pulled up, and we climbed aboard, sunhats perched on heads, debit cards ready in hands.

?I smiled as I asked for two tickets. The driver looked up, frowning. He waved his hands dismissively and replied, “Cash only.”

?The payments professional in me froze. Cash only? When was the last time I’d even carried cash? These days, I never do. One of the last places I’d expect to need it was in a busy tourist destination in Europe.

?But cash, as I continued to discover, is overwhelmingly the preferred payment method in Santorini – despite the availability of alternative payment methods. Every coffee I sipped, gyros I ate, and taxi ride I took, I was asked to pay in cash. Why?

?It just so happens that Greece ranks first in Europe for cash preference in peer-to-peer, according to the ECB.

?Greece also experiences more technical difficulties with its payment’s infrastructure than any other country, with nearly one in five (17%) Greek respondents reporting issues with card payments compared to over one in ten (13%) across Europe.

?Now, the report focuses on consumer habits. But we know that card payments are not cheap for merchants. So while most restaurants and bars in Greece accept cards, it’s easy to see why cash is preferred. The networks take a slice. As do the acquirers. So, many businesses will still happily take your coins over card.

?Among the top benefits of cash for Europeans overall were anonymity and privacy (41%), expense control (35%), and instant transactions (30%).

?Besides, cash is (relatively) safe. It’s instant. It’s comforting. It doesn’t glitch. And it’s (mostly) free.

?The global rise of instant payments

The experience left me thinking: could the introduction of instant payments reshape Europe’s relationship with cash?

?Less than a decade ago, India, my home country—historically one of the most cash-reliant economies on the planet—loved cash. But then along came UPI (Unified Payments Interface), an instant payments scheme, in 2016 and suddenly, everything changed.

?India has embraced UPI at a pace few could have imagined. Over 350 million people use it monthly, and around 80% of digital retail transactions are now UPI-based. On a trip home I found tea stalls accepting payments for as little as a penny via UPI QR codes (printed on paper and pinned to a table). Hard-to-reach communities, which once struggled to send and receive money, access the mainstream economy with ease. It has totally transformed the market.

?But it’s not just India. Brazil has seen similar results with PIX, its instant payment system, as has Kenya with M-Pesa, and Thailand with PromptPay.

?Europe will introduce instant payments later this year as part of the Instant Payments Regulation. Starting in October, every bank in the Single European Payments Area (SEPA) must be able to send and receive payments in 10 seconds or less. These fast, frictionless, and (mostly) free transactions will be available 24/7, 365 days a year, and cost no more than a traditional digital payment.

?It’s an exciting prospect for Europeans. The question is: will we embrace instant payments in the same way?

Faster is better

Among the top benefits of cash for Europeans overall were anonymity and privacy (41%), expense control (35%), and instant transactions (30%). Instant payments do not directly address the first. But they have a good answer for the latter points. They’re incredibly fast. They’re secure. They can help with financial management. And they’re available 24/7.

But there’s so much more. Instant payments in Europe will allow buskers and restaurant staff to receive tips instantly. With earned wage access schemes, employers can pay their staff daily, strengthening recruitment and retention. You and I can settle the bill for our drinks and taxi ride before we get home from our night on the town. Businesses, from small corner stores to multinational corporations, will be paid on the spot by their customers. Supply chains, cash flow, and business-to-business relationships are boosted as the speed and velocity at which money changes hands increase.

?What’s more, instant payments will help to reduce European reliance on US card networks. That will make it cheaper for merchants to accept digital payments.

?In other words, they go a long way to solve many of the reasons cash is the preferred choice.

Old habits die hard

Cash, as the ECB report shows, is on a slow but steady decline. With instant payments being introduced at the end of 2025, it will be fascinating to see how far we’ve come in the 2026 report.

?Santorini—with its pastel sunsets, rugged cliffs, and enduring love for cash—stands as a microcosm of Europe’s complex payment landscape. But as instant payments rise and evolve, will this picture change? The next chapter in the story of cash is just beginning. Until then, I’ll be keeping my card—and perhaps a little cash—close at hand for my next trip to Fira.