Bank of Italy: -20% of withdrawals in cash, on cards and contactless, especially in the Center and in the South

After a brief overview of the trends prevailing before the spread of the epidemic, the document “analyzes the dynamics of the main indicators on payment habits during the two waves of infections that affected the country”. The main results show “that the effects observed during the first wave of infections largely continued in the remainder of 2020 with greater use of cards at the physical point of sale (compared to cash) and payment instruments that favor distancing physical. In particular, the health emergency and government measures to contain the spread of the epidemic have led to a more intense use of electronic tools (bank transfers, direct debits, debit and credit cards) compared to traditional ones (cash, commercial collections and checks). . Contactless technology and, more generally, payment cards have seen a strong expansion in the Center and in the South, where there was a gap in use compared to the North before the pandemic; in the South, in particular, the propensity to use cards rather than cash has increased. The incidence of online purchases, on the other hand, grew more in the North, which started from a situation of a more advanced digital ecosystem and was affected by greater restrictions ”. Specifically, there is a general increase in the diffusion of innovative payment technologies. “The share of online transactions on the total card transaction went from 25 percent recorded just before the lockdown to over 40 percent in April 2020. In physical stores, the share in value of contactless card transactions increased, which a May 2020 exceeded 55 per cent of the total value spent with cards (considering those enabled for contactless) compared to 35 per cent in January; above all, the component of transactions where the PIN or paper signature is not required has increased ”. A trend that continued throughout the year, taking into account the new restrictive measures to deal with the second pandemic wave: “in the last quarter of 2020, the share of e-commerce and contactless transactions (including mobile payments) exceeded on average respectively 30 and 60 per cent of total purchases by card, compared to 22 and 33 per cent recorded in the same period of 2019 “. What about cash? “The use of cash in payments decreases: in the first half of 2020, which includes the lockdown period, ATM withdrawals decreased in volume by more than 20 percent on an annual basis, compared to -0.4 percent of payments on POS. In the second half of 2020, which includes both the intermediate phase and the outbreak of the second wave, there is an improvement in the overall trends but the marked contraction in ATM withdrawals is confirmed, down by 15.1 per cent on an annual basis, compared to payments. on physical POS, which instead increased by 6.6 per cent, also driven by incentive programs in the last month of the year “.