Greece has long preferred using cash for payments and has earned one of the lowest number of electronic payment transactions per person in the EU. The restrictions on cash imposed by the government to help prevent a collapse of their banking system, created an abrupt turnaround. Card issuance activity has skyrocketed:
In a country where cash is king and undeclared transactions still make up about a quarter of the economy, about one million debit cards have been issued by banks since the government closed lenders for three weeks and imposed controls on euro bills.
The number of active Visa debit cards in Greece more than doubled in July from previous months, said Nikos Kabanopoulos, the country manager for Visa Europe
The preference for cash was supported by a healthy shadow economy that avoided taxes, which in turn contributed to Greece’s issues meeting their obligations with the International Monetary Fund. It will be interesting to study how consumers react after the economy is stabilized. Will they return to cash or will they embrace the convenience of card based, electronic payments.
Overview by Sarah Grotta, Director Debit Advisory Service at Mercator Advisory Group
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