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Cash is a Pillar of the EU Retail Payments Strategy

Categories : Cash is a public good
October 1, 2020
Tags : Acceptance of cash, Access to cash, Europe, Legal tender, Regulators
On 24 September 2020, the Commission adopted a retail payments strategy for the EU that aims to further develop the European payments market so Europe can fully reap the benefits of innovation and opportunities that come with digitalisation. Maintaining the availability of central bank money is a core element of the strategy.
Guillaume Lepecq

Chair, CashEssentials

This post is also available in: Spanish

Cash accounted for 73% of all physical retail payments in 2019

On 17 September, ECB President Christine Lagarde shared her vision of payments in a digital world and addressed cash, European payments sovereignty and  central bank digital currencies. According to the ECB’s new payments survey, which is due to be published in November, cash is the most common way to pay in the euro-area, with cash payments accounting for 73% of all physical retail payments in 2019. Lagarde said: “The Eurosystem will continue to ensure that all citizens have access to banknotes at all times.”

The Commission’s strategy is in line with the ECB’s vision and focuses on creating the conditions to make the development of instant payments and EU-wide payment solutions possible; consumer protection and ensuring payment solutions are safe; and lessening Europe’s dependency on big global players in this area. It is articulated around 4 pillars:

30 million adults in the EU do not own a bank account

Cash is an integral part of the first pillar. The Commission recalls that “It is still the only form of money individuals can hold directly. As such, it should remain widely accessible and accepted.”  While promoting the emergence of digital payments, the Commission recalls that there are about 30 million European adults who do not have a bank account.

The Commission recognises nonetheless that the accessibility and acceptance of cash have decreased in recent years. This trend has accelerated during the pandemic due to concerns over banknotes and coins being associated with the transmission of the virus as well as a shift to online shopping during lockdowns.

Cash is a public good

In order to preserve access to and acceptance of cash, and its legal tender, the Commission:

In the framework of the Euro Legal Tender Expert Group (ELTEG), the Commission will take stock of latest developments regarding the acceptance and availability of cash within the euro area with the ECB, national central banks and treasuries. In parallel, it will closely follow the work on access to cash to be carried out under the auspices of the Euro Retail Payments Board. Taking this work into account, as well as the deliberations of the Euro Legal Tender Expert Group, it may decide to take appropriate action to protect the acceptance and availability of euro cash at the end of 2021.

In 2010, the Commission issued a non-binding recommendation stating that the acceptance of euro banknotes and coins as a means of payment in retail transactions should be the rule, and that refusals should be possible only on the basis of the “good faith principle”. It also implies that where a payment obligation exists, the legal tender of euro banknotes and coins implies: (a) mandatory acceptance by the creditor; (b) at full face value; and (c) with the power to discharge the payment obligation.


This post is also available in: Spanish