The views expressed in this article are solely those of the author and should not be attributed to the European Payments Council.
Over the last five years, an evolution has taken place in Greece towards a more integrated retail payments market. While other traditional means of payment, such as cheques, declined significantly, electronic payment instruments and services gained importance. We interviewed Vassilis Panagiotidis from the Hellenic Bank Association (HBA) to learn more about Greece’s progress towards a cashless society.
In Greece, cashless payment instruments (in particular, card payments) have gained importance in recent years. How do you explain these changing payment habits?
Over the last five years there has been a marked push in Greece to facilitate the use of electronic payment instruments and services by all stakeholders involved (public and private sector, the state, the National Central Bank, banks, trade and consumer associations).
The key drivers of this tendency are the following:
- the June 2015 imposition of restrictions on capital transfers and cash withdrawals, which, as of 1 September 2019, have been repealed;
- the state’s constant objective to increase tax revenues by curbing tax evasion; and
- the process of incentivising consumers to use e-payment methods more frequently than traditional ones such as cash via the establishment, in 2017, of a public lottery programme through which 1,000 consumers per month receive a thousand euros; via tax deductions for using electronic payment transactions (i.e. card payments, credit transfers, direct debits and e-money wallets); and via many rewards from bank loyalty programmes introduced since 2005.
In addition, Greece is a popular holiday destination for locals and foreigners. According to our data, the number of transactions conducted in 2018 with payment cards issued by non-resident payment service providers ( ) amounted to 70.6 million (ten percent of the total number of payment card transactions), whereas the number using payment cards issued by resident amounted to 655 million (ninety percent of the total number of payment card transactions).
Last but not least, the number of point-of-sale (POS) terminals in Greece increased considerably between 2015 and 2018, by two hundred and fifteen percent (2015: 219,071, 2018: 690,689). According to the G4S 2018 Cash Report, Greece’s POS terminal network is the second largest per capita at international level, only trailing Paraguay.
Greeks still rely heavily on cash payments. What is the estimated share of cash payments versus cashless payments, and how do you explain this relatively common use of cash?
According to the ECB 2018 Payment Statistics, the number of cashless transactions per inhabitant in Greece was 112 (2016: 73, 2014: 39), whereas fifty-three percent of which were conducted via the use of payment cards (2018: 59, 2016: 28, 2014: eight).
Nevertheless, a large portion of everyday payment transactions are still conducted in cash. It is indicative that, according to a recent ECB Report, the number of cash payment transactions in 2016 was eighty-eight percent and their value was seventy-five percent of the total, while at the same time both the value of ATM withdrawals and the ratio of currency in circulation (CIC) vs. Gross Domestic Product (GDP) showed positive growth between 2012 and 2016 (seventeen point two percent, compared to the global average of nine point six percent). The key drivers of this are the following:
- according to national regulations, taxpayers aged 70 or more, as well as taxpayers with disabilities (of eighty percent and above), are exempted from the obligation to use electronic payment instruments and services, in order to maintain their annual income tax reduction;
- there are still a considerable number of people below the age of 55 without internet access or who do not use the internet frequently; and
- the incentives for the use of e-payment solutions provided by the public sector and the state versus those provided by the private sector (e.g. bank loyalty programmes) have proven, to a certain extent, inadequate. Therefore, an evaluation process on the effectiveness of the existing public sector incentives is needed, accompanied by a strategy regarding the introduction of new ones.
What are expectations for the development of instant payments in Greece, including participation in the Single Euro Payments Area ( ) Instant Credit Transfer ( ) scheme?
In May 2017, HBA member banks rolled out the IRIS Online Payments solution, which is an efficient instant payments tool [similar to the scheme managed by the ] for their retail and corporate clientele, as well as IRIS Mobile Payments, a mobile app for person-to-person ( ) and person-to-business (P2B) instant payments of up to five hundred euros per day per registered payer.
In addition, there is genuine interest from our member banks in adherence to the scheme. This is why IRIS Online Payments, the domestic solution dedicated to euro credit transfers, will be aligned to all the key features of the scheme in the second or third quarter of 2020.
Finally, a broader question: how do you see the Greek payment landscape developing over the coming five years?
Given that cash is still the primary means of payment in Greece, the overarching goals of the domestic banking system over the coming five years are as follows:
- further reduction of cash usage by consumers and enterprises via the provision of incentives for the use of electronic payments solutions;
- complying with the new regulatory framework pertaining to payments and digital transformation (e.g. Payment Services Directive 2 ( );
- producing sustainable economics for payment services;
- investing in security, technical infrastructures, user friendly payment solutions, rapid execution of payment orders and attractive pricing for payment service users; and
- further approximating the eurozone average of cashless transactions and value per inhabitant in Greece1 (2018: forty-two percent, 2016: thirty-two percent, 2014: fourteen percent).
1.The percentage of number of payments per capita Euro Area vs Greece. ECB Payments Statistics, July 2019
Infographic: The Greek payment landscape (November 2019)
(Click to enlarge and download)
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Vasilis Panagiotidis
In October 2000, Vasilis Panagiotidis joined the Hellenic Bank Association (HBA), a non-profit entity representing Greek and foreign credit institutions operating in Greece. Ηe is the Head of the Payment Systems, Anti-Fraud/Anti-Money Laundering and Physical/Logical Security departments.
He represents HBA member banks in the committees and working groups of the European Banking Federation (EBF) and the European Payments Council (
), of which he is a board member representing a coalition of
members.