Is Europe going for a cashless society?

The advocates of cashless payments say that this comes with various benefits. A recent report by the  World Bank shows that cashless payments are greener, since stopping the use of physical cash saves on environmental cost and reduces the need for transport, for example, to pay bills, receive payments, or withdraw cash.

Climate co-benefits also emerge from the fact that digital payments are an enabler for investment in green initiatives. For example solar or wind energy- type projects hinge on the availability of digital payments, and digitalization makes it possible to offer, in a more affordable way everything from relevant insurance to funding and means of investment.

And when it comes to Eastern Europe countries such as Poland, Romania and Hungary are experiencing a fast-paced transformation, propelled by innovative startups, favorable regulatory frameworks, and increasing consumer demand for digital finance solutions.

But digital payments is not only a way for Europe to become greener its advocates believe, to have a more efficient and cost savvy economy but also a means to innovate. In a US vs China-dominated world, technology will make or break nations and alliances, and the European Union is in no flattering position when it comes to matching up with the tech superpowers. That is why European Commission President Ursula von der Leyen has declared digitization and cashless payment a top priority — up there with climate protection.

The move has also its opponents arguing that implementing such a system might be done too hastily.

The debate reached the European Parliament. Rareş Bogdan, a Romania MEP from the European People's Party Group, asked for restrain in implementing the measure at national level saying that “this issue gives serious headaches to those who are going to collect and use cash for their direct payments. It needs further consideration and a proper analysis.”

On the other side of the political aisle, Renew Europe MEP Ivars Ijabs shadow rapporteur on the instant payments regulation, said: “In an era of digital transformation, instant credit transfers stand as a beacon of efficiency and convenience, paving the way for a seamless and interconnected European financial landscape. Their swift execution and accessibility across borders empower individuals and businesses to conduct transactions with unparalleled speed and flexibility, fostering a more integrated and dynamic EU economy.”

Supporters of the measure consider the switch to the cashless payments and digital currency as contributing strengthening the EU Single Market, making it easier, faster and cheaper for Europeans and businesses to trade across the Union. They say that we need a set of laws that would limit cash payments as part of a wider set of EU instruments designed to fight money laundering and financing terrorism.

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