2016-01-28
For purchases and services, residents tend to pay in cash less frequently; the amount spent in cash has also decreased. In addition, the number of residents having payment cards grew; a large share of them, however, are still not using a payment card for daily settlements, shows a survey of residents conducted on behalf of the Bank of Lithuania.
In 2015, the number of Lithuanian residents who have a payment card was growing, and, despite the fact that the majority of residents having payment cards still do not have a habit of consistently using them at distribution and service provision locations, we see a great potential for the growth of card use for daily payments’, said Marius Jurgilas, Member of the Board of the Bank of Lithuania.
Over 2015, the number of respondents having a debit card increased by 5 p.p. — to 87 per cent of the surveyed having an account. However, in spite of the fact that people acquire a payment card, not all use it for executing payments. A day prior to the survey, 58 per cent of respondents having a payment card were not using it. Residents indicated payment cards as being a safer means of payment more often than they indicated cash.
According to the data of credit institutions, over the year (in the third quarter of 2015 year on year) the number of POS-terminals at distribution and service provision locations in Lithuania grew by a fifth — to 45 thousand; however, residents still lacked possibilities for card payment. According to the survey, the majority of the respondents having payment cards (41%) claimed that there is a lack of POS-terminals at markets and fairs, beauty and cosmetology salons (21%), healthcare facilities (16%), kiosks, small rural shops and post offices (14%).
We project that there will be continuously more places where card payments will be possible. This will be reinforced by not only the demand and customer needs but also the EU Regulation on interchange fees, which came into force last year. The Regulation provides preconditions for the reduction of card acceptance fees that apply to merchants and service providers’, said M. Jurgilas.
With the increasing number of debit cards, we observed an opposite trend in the credit card sector. Over the year, there were significantly fewer customers who found this kind of card to be useful: in 2014, 23 per cent of the surveyed having an account owned a credit card, in 2015 — 14 per cent.
Over 2015, the number of residents who earn income in cash decreased by a third — in 2015, it accounted for 29 per cent. According to the survey, 40 per cent of the surveyed had their salaries transferred to their account and hence were subject to smaller fees imposed by credit institutions.
A day prior to the Survey conducted on behalf of the Bank of Lithuania, 31 per cent of respondents did not buy anything using cash. While carrying out an analogous survey in 2014, there were fewer of such people (by 9 p.p.). Last year, one person paid in cash on average 1.2 times per day, while in 2014 — 1.8 times. The survey shows that the amount of cash spent per day is also decreasing. In 2015, the median of settlements in cash decreased from EUR 9.6 to EUR 7.2.
According to the data of the survey, last year, 80 per cent of Lithuanian residents had an account with at least one credit institution. 67 per cent of the surveyed used banking services, 43 per cent — services provided by payment institutions. Users of services provided by credit unions and electronic money institutions accounted for a small share — 3 and 5 per cent of the respondents respectively.
The survey revealed that, for two thirds of respondents having an account with a credit institution, the pricing of commercial banks’ payment services is sometimes or always hard to comprehend. A larger share of respondents (41%) having an account with a bank or a credit union noted that they would prefer making a fixed monthly payment for the basket of payment services, where standard fees would be imposed if it were to be exceeded, to paying taxes to the bank for each service and each payment transaction separately. 33 per cent of respondents having an account would choose the latter pricing.
Even though there are increasingly fewer settlements in cash, they still dominate when paying utility fees. A month prior to the survey, a large share of respondents (42%), despite having an account with a bank, paid for services in cash at payment institutions. 35 per cent of the surveyed having an account made transfers via the Internet themselves, while 21 per cent used the direct debit payment service.
The detailed Review of the Survey of the Habits of Lithuanian Residents in Using Payment Services is published on the website of the Bank of Lithuania.