Introduction of euro increases number of card payment transactions across Baltic States

In the first half of this year, the number of card payments in Lithuania increased by 20 per cent year-on-year. Card payments increased 14 per cent in Latvia and 7 per cent in Estonia.

In terms of cashless payments and bank card usage, Estonia is ahead of the other Baltic States and exceeds the EU average. Latvia and Lithuania remain below the EU average. In the first half of 2015, 69 card payments per card on average were made in Estonia; whereas 42 and 29 transactions were completed by Latvians and Lithuanians, respectively. Estonian households are withdrawing cash much less frequently and are primarily using bank cards for purchases in Estonia and abroad. Although card usage has become noticeably more frequent, Lithuanians still prefer to withdraw cash from ATMs and pay for goods and services in cash.

SEB Latvia’s social economy expert, Edmunds Rudzītis, observes: “Statistics show that bank card usage grew rapidly during the years in which the countries joined the euro zone. In 2011, when Estonia became a Member State of the euro zone, card usage here grew the fastest among the three Baltic States, with growth reaching 18 per cent for the year. The same kind of change was also evident in Latvia (2014) and in Lithuania (2015) when the euro was adopted. One may conclude that the introduction of the euro has helped to reduce the relative importance of cash when it comes to making household payments.”

In Latvia, card transactions completed abroad accounted for 11 per cent of all card transactions. In Lithuania, 8 per cent of all card transactions were completed abroad. In Estonia, making purchases abroad is less popular compared to the other Baltic States. In the first half of 2015, only 5 per cent of all card transactions were completed abroad. During the same period, the total turnover of purchases made abroad with payment cards issued in Latvia amounted to EUR 500 million. In Lithuania and Estonia, purchases made abroad with payment cards amounted to EUR 352 million and EUR 231 million, respectively.

The full Baltic Household Outlook can be read in English, here: www.seb.ee/BHO_oktoober_2015.pdf

Additional information:

Mihkel Nestor, Economic Analyst at SEB Estonia +372 665 5172, mihkel.nestor@seb.ee
Evelin Allas, SEB Estonia Communications Manager +372 66 55 649, +372 51 11 718, evelin.allas@seb.ee