This chart from the Economist shows the dramatic differences in the use of card payments among various European countries (this is in number of transactions per person per year):

The Economist goes on to explain the differences:

“Swedes rarely handle cash; the volume of card payments has increased tenfold since 2000 and only one in five payments—5-7% if measured by value—are made in cash today. In much of northern Europe the situation is similar, with “no cash” signs increasingly popping up in shop windows. But travel south or east and a different picture arises; in Italy 83% of payments are still in cash. Whereas Norwegians made 456 electronic transactions per person last year, Italians made only 67 and Romanians 17, according to the Boston Consulting Group. Most surprising is Germany’s reluctance to dispense with “real money”. Over three-quarters of German payments are still made in cash and “cash only” signs are not that uncommon.”

As for why these differences exist:

In the Benelux and Scandinavian countries, banks were early promoters of electronic payments and made it easier (and cheaper) for customers to use cards. In thinly populated Sweden and Norway, maintaining a large branch and ATM network is costly; Swedbank, Sweden’s largest retail bank, has only eight branches that handle cash.

Challenge your students to figure out the comparable use of card payments in the US (Webquest) and explain their personal preference for cash or card payments.

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Be sure to check out the NGPF Activity: Analyze How We Interact With Banks

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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