how do people behave with payment cards?

It is undeniable that the arrival of the payment card changed the financial world: its size, portability and general practicality allowed it to quickly become popular and spread like the proverbial wildfire. And it is easy to understand the payment card's appeal: paying in cash involves waiting in line while the cashier handles the register, takes the cash, returns the change, and gives out a receipt. When we compare that to a simple swipe of the card and a quick signature, the payment card's appeal becomes completely understandable.


In fact, in the 21st century's Now Economy, when providing a service and satisfying a customer's need instantly is no longer a benefit but a basic requirement, payment cards have that dream of every business owner and marketer: appeal across all demographics.

Cash, however, is still king. After all, habits are always hard to break, even in the face of various benefits and features payment cards offer to the everyday consumer.

But with the many innovations in payments - and especially now, during the ongoing digital revolution - that have been sweeping the world in the past decades, several pretenders to the proverbial throne have been slowly but surely gaining favor with the people.

We don't need to look any farther than the European Union, where the overall payment culture has been experiencing an ongoing shift since the turn of the century. In 2017, the most dominant non-cash method? Payment cards - specifically debit cards, taking up a stunning 42% of the non-cash payment total.


And the shifts continued, as revealed by research by Worldpay conducted in 2018, cash payments climbed up to 47% but payment cards (debit, credit, and charge) still held the top spot, with eWallets carving out a niche for themselves.

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The reasons for such a significant and impressive increase in the rate of payment card adoption are, according to RBR's research, partly to be found in the way card companies and other financial institutions have begun changing and adapting their approach to potential customers. Financial inclusion programs are drawing new people in.

it is becoming increasingly difficult to find a merchant that doesn't accept cards, and there is also the ongoing switch the older age groups - primarily Baby Boomers - are making from cash to payment cards due to their ease of use. When coupled with developing markets need for fast, simple and secure payment methods, all of which cards offer, growth is unavoidable, especially with the addition of contactless payment technology.


The digital revolution is also marked by hybrids that most business experts may not have expected to encounter, with one such being the fact that many people will visit an online retailer, make their purchases using the site's shopping cart but instead of paying with, say PayPal, they will do so with their credit or debit card. This "behaviour oxymoron", as experts call it, is another clear sign that payment cards still have a future ahead of them.


It is also the reason several top fintechs, including Apple and Revolut, have pivoted from their previous digital-only strategies into creating payment cards of their own with Apple's Apple Card recently marking the company's sure-to-be-significant partnership with Mastercard. Both cards are made as the "backup" option since not everyone has contacless terminals.


With the EU market being comprised of countries of various historical and cultural heritages, each presenting a unique payment landscape of their own, it is easy to understand the diversity in preferred payment methods presented in the aforementioned Worldpay research for 2018. Taking a look at two European countries, the UK and Germany may not give us an overview of the entire market but can still provide interesting insights.

If one were to make a list of long-time economic trendsetters for Western Europe, the UK would certainly be at the very top - London in particular, which has been considered the capital of progressiveness in finance since the 1970s. After all, the world's first ATM was installed just outside London half a century ago, courtesy of Barclays Bank.

Debit cards have for quite some time been the preferred non-cash method for Europeans and UK citizens have followed the norm here - but they've also made the UK, in 2017, the country where debit cards overtook cash payments for the first time.


Germany has had a longstanding reputation as a country where cash is king. When queried in surveys, Germans would regularly explain their preference for cash payments by stating cash makes it easy to keep track of your finances and expenditures, with financial experts adding privacy concerns and a fear of debt to the list.

However, a study by EHI Retail Institute in Cologne in 2018 showed that card payments edged out cash payments in Germany. The edge is slim, €209 billion in total for cards and €208 billion for cash, but it points to a growing trust in card payments.

Research reveals that both the UK's and Germany's significant increase in card payments is owed to a growing trust in payment cards. 

In the UK a large percentage of older people are now more comfortable with payment cards (with biometric cards expected to increase that percentage even further), while in Germany one person in two now prefers cashless payments, with 49% of surveyed people expressing belief they will make even more frequent card payments in the future.