What are the most popular payment methods and payment instruments in your jurisdiction?

Fintech (2nd edition)

Belgium Small Flag Belgium

Card payments and fund transfers are the two main (retail) payment methods in Belgium.

Fund transfers occur directly between different banks, PIs and EMIs and are cleared by the local CEC or European Target2 payment system. These payment operations can be initiated online (as the case may be, via a banking or payment app.) or offline

Card payments rely on a card scheme (Bancontact / MasterCard) and include the intervention of a card issuer (mostly banks or PIs), a payment acquirer and a retail payment processor (Worldline in Belgium). Most payment cards are still physical, while virtual cards are gaining market share very quickly.

International payment methods linked to credit cards (such as Paypal, Google and Appel Pay etc) are also available to customers.

Money remittance providers are also common in Belgium and focus primarily on both foreigners and locals sending money to their relatives in foreign countries.

Bermuda Small Flag Bermuda

The most popular payment methods and payment instruments still tend to be traditional, for example, utilising fiat bank accounts for credit transfers, as well as debit and credit cards. However, more businesses in Bermuda are starting to accept cryptocurrency payments. On 16 October 2019, the Government of Bermuda announced that it plans to start accepting for payment of government taxes, fees and services, 1:1 US dollar backed stablecoins that get licensed by the Bermuda Monetary Authority.

Brazil Small Flag Brazil

In Brazil, the most popular payment methods and payments instruments include: bank slips (“boletos”); debit card; credit card and pre-paid accounts (e-wallets).

Chile Small Flag Chile

Cash is still the most common payment method in Chile, primarily because people over 45 years old still prefer paying in cash. However, debit cards have grown significantly since Banco Estado created an easily accessible bank account associated with it debit card (Cuenta Rut). The Cuenta Rut bank account began operating in 2006 and today has more than 7 million customers nationwide, a surprising figure that shows the massive backing it received from the public. The large number of users shows the influence such account had on the expansion of various payment methods other than cash, such as debit cards, to pay at stores and using it to make online payments.

Another major change, supporting both the continued increase in the use of cards and the use of digital payment platforms, was the enactment of Law N° 20,950. As noted above, Law N° 20,950 authorized non-bank entities to issue and operate payment cards with provisional funds. Thus, the law created the opportunity for new players to enter the payment system industry in Chile, making room for Fintech companies to enter the financial market.

Finally, the Chilean government recently announced that a proposal to modify the payment system including debit, credit, or payment cards would be introduced soon. The current system provides for three players to be involved in the process: a. Issuers (banks), b. Payment Processors (operators in charge of affiliating the stores to the card payment network and then processing these payments, Transbank is the leading company in Chile), and c. Stores. The proposal is to move on to a system of four players: a. Issuers (banks), b. Payment Processors, c. Debit, Credit, and Payment card companies, and d. Stores. In other words, the credit card companies would enter as new market players, whereby the Payment Processor would no longer have the ability to control the prices for the issuers and merchants.

United States Small Flag United States

Consumers continue to increase their use of cashless forms of payment, including credit cards, debit cards (including prepaid), checks, and ACH payments. All forms of cashless payments continue to increase in both number of transactions and dollar volume. In the United States, debit and credit cards are used for most noncash payment transactions. Even so, ACH debit and credit transactions comprise the largest dollar volume of payments in the United States mainly resulting from business-to-business and direct deposit payroll transactions.

Recent trends have shown that debit card usage has increased by the greatest percentage of all noncash payment methods. Card-not-present transactions also continue to increase as more payments take place online and through mobile transactions. Finally, cryptocurrency payments remain nascent in the United States. While the extent of cryptocurrency’s use in payments is unclear, more retail outlets are now accepting certain cryptocurrencies for payment.

United Kingdom Small Flag United Kingdom

The most popular payment method by far is the debit card, which overtook cash as the most frequently used payment method in the UK in the last quarter of 2017. Around 98 per cent of the population holds a debit card, using these to make 15.1 billion payments in 2018. This represents an increase of 14 per cent over 2017. The use of debit cards is forecast to continue to increase to 50% by 2024.

The use of credit cards also increased in 2017, by 4 per cent over 2017, to account for 3.2 billion payments. Around 65 per cent of adults in the UK hold a credit card. As with debit cards, the use of credit cards is forecast to continue to increase.

In terms of payment method, the number of contactless payments in the UK has increased significantly, rising a staggering 31 per cent during 2018 to hit 7.4 billion payments. These payments are made by the 124 million contactless-enabled cards in circulation by the end of 2018, with 84 per cent of debit cards and 64 per cent of credit cards capable of making contactless payments.

In contrast to credit and debit cards, the use of cash as a payment method has continued to decline. While 61 per cent of payments made in 2007 were made in cash, only 28 per cent of payments made in 2018 were. This decline is forecast to continue, although predictions do not indicate that cash will become extinct as a means of payment.

In terms of payment methods used for credit transfers, direct debit, standing orders, Bacs Direct Credit and CHAPS are all used. Of these, the use of direct debit is widespread, with 90 per cent of UK consumers using direct debit to pay some or all bills. This amounts to 4.4 billion payments for a value of £1.327 billion in 2018. The payment method most frequently used by businesses and government remained Bacs Direct Credit. CHAPS is used principally by financial institutions for (large) corporate treasury payments. The result is that a mere 0.1 per cent of the total volume of UK payments made via CHAPS accounts for 91 per cent of the total value of all payments made: 48.5 million payments for a value of £84 trillion. Online banking and mobile banking transfers, which are largely underpinned by the Faster Payments Service, have also enjoyed significant increases in popularity, with 72% of UK adults using online banking and 48% using mobile banking in 2018.

Last and least, the use of cheques to make payments continued to decline, with only 342 million cheques used in 2018 in contrast to 1,581 million in 2007. With the increase in the use of card and other newer methods of payment, this decline is forecast to continue.

Looking forward, the use of newer payment methods such as PayPal, Google Pay, Samsung Pay and ApplePay is projected to increase in the coming years, and in 2018 these payment methods together accounted for a greater volume of payments than either standing orders or cheques. as is the use of payment initiation services to make credit transfers at an online (or potentially in-person) checkout. Source: UK Payment Markets Summary 2019, available at www.ukfinance.org.uk/sites/default/files/uploads/pdf/UK-Finance-UK-Payment-Markets-Report-2019-SUMMARY.pdf)

China Small Flag China

While bank transfers, promissory notes, etc. remain very common payment methods in some contexts, particularly in B2B transactions, there is no doubt that Alipay and WeChat Pay are the most popular general use payment methods in China. Alipay and WeChat Pay have become part of daily life. These services are accepted by a broad range of businesses, from high-end restaurants and designer boutiques to street vendors and taxi drivers, and everything in between. Customers can simply press the ‘pay’ button on their smartphone and a Quick Response (QR) code will appear for the vendor to scan using a point-of-sale (POS) device, and vendors who do not have POS devices often print and display QR codes that the customers can scan on their smartphone and then set the amount to be transferred to such vendor’s electronic wallets. Phone-scannable QR codes also mean that anyone can become a merchant. Transfers between individuals are also convenient, simple and free of charge. Since cash is no longer widely used, Chinese people rarely carry a wallet, cash or bank card at all. Alipay and WeChat Pay have changed Chinese people’s social habits and China is moving further towards a cashless society.

China has already grown to be one of the largest contributors to the global payment services market, with giant domestic service providers like WeChat Wallet and Alipay having a dominant role in the industry, far beyond China’s shores.

Colombia Small Flag Colombia

Central Bank surveys show that 92% of transactions carried out by private persons are cash-based, showing its prevalence as a preferred payment method. Hence, during 2018 debit cards were used for cash withdrawals in 83% of uses. In contrast, credit cards were used during the same year 73% for purchases.

Corporates prefer other payment methods. Cheques continue to be actively used, as 11.5 million cheques were settled in 2018 (GDP value of 19%) down from 40.6 million cheques in 2009. Electronic transfers had a daily average of COP 16.79 Bn in 2018, with 97% being carried out by companies and representing 85% of total payment operations carried out by companies.

Even though 45% of transactions are carried out via internet, an ample base of payment providers exists in the country including 435.836 POS terminals and 134.318 banking correspondents, mostly comprised of retailers or convenience stores. Postal couriers also provide payment methods within the country as immediate cash payment services nationwide are common in every town.

UAE Small Flag UAE

With respect to small and regular amounts, payment by way of cash remains the most prevalent method of payment in the UAE: many small establishments in the UAE only accept cash. However, an increasing number of UAE residents are opting to pay by way of debit and credit cards: VISA and MasterCard credit cards are widely accepted by businesses and government services.

With respect to larger amounts, cheques are an important payment instrument in the UAE and are notably used for rent payments.

Online payments are increasingly common across the entire spectre of payments. Visa’s CNP transaction data illustrated a growth of e-Commerce by 31% in the UAE over the 12 months leading to June 2019 .

Various other digital initiatives are increasingly utilized; however, these initiatives represent a small segment of payment mechanisms. Such initiatives include the government’s Mobile Wallet, Etisalat Wallet, NOL Cards, Apple Pay, Samsung Pay and Alipay. Alipay, a large online and mobile payment platform, is also active in the UAE. It should be noted that the Dubai government introduced plans to launch its own wallet emCash which can be used as a digital currency and cryptocurrency as well.

Taiwan Small Flag Taiwan

Credit card payments remain the most popular payment method in Taiwan; however, the number of retail sellers offering, as well as consumers using, mobile payments is on the increase, and people in Taiwan (especially the younger generations) are getting used to purchasing goods and services not using cash or credit card. Some of the mobile payments use QR code system or other means to incorporate credit card functions into smartphones, while some of the mobile payments are offered based on digital wallet services offered by the electronic payment institutions licensed by the FSC. The Taiwan government authorities also provide various incentives to promote mobile payments. For instance, the Ministry of Finance provides a tax incentive to small businesses by allowing them to continue paying 1% in business tax (compared to the regular rate of 5%) so long as they offer mobile payment options to consumers.

Denmark Small Flag Denmark

The most used payment method in Denmark is payment cards, which makes up 73 % of all retail payments in Denmark. The most used payment instrument is the national payment card Dankort which make up the majority of card payments in Denmark. However, the use of international payment cards, like Mastercard Debit and Visa Debit has increased lately, and made up 27% of payment card payments in the first half-year of 2019.

The use of digital cards like Apple Pay, Google Pay and the national solution Mobilt Dankort is growing, but overall the use is still limited. Regarding mobile payments, it is the national solution, MobilePay, that is the most used; hence there is not a mainstream competitor to MobilePay at the moment.

Switzerland Small Flag Switzerland

A study made in 2017 by the SNB showed that the most popular means of payment of private persons in Switzerland continues to be cash (70% of transactions, 45% of value). Of electronic means of payment, the most often used is the debit card (ec card, Postfinance), followed by credit cards. Professional payments of finance companies are dominated by the Swiss Interbank Clearing (SIC). Payment aps are not yet widely used, due to competition between different schemes offered. Only recently, a uniform solution was offered by all major banks, under the brand of TWINT. Apple pay and paypal are often used for online purchases.

Spain Small Flag Spain

The most popular payment methods in Spain are debit or credit card payments, followed by Paypal and, finally, by bank transfers.

Germany Small Flag Germany

The latest study by Deutsche Bundesbank ‘Payment behaviour in Germany in 2017 – Fourth study of the utilisation of cash and cashless payment instruments’ showed that the most popular means of payment of private persons at the Point of Sale (POS) in Germany continues to be cash (74% of all transactions). The proportion of cash in relation to overall turnover was below 50%. Of electronic means of payments, the most often used is the debit card (predominantly the girocard with PIN, signature or contactless) (35% share of turnover, 19% number of transactions). The corresponding share of turnover with credit cards was up slightly to just under 5%. The corresponding share of turnover with contactless card payments was above 1%. Rather few payment transactions are made via smartphone and with customer or prepaid cards. The use of e-payment schemes for online shopping has since become established. Their share of overall turnover and in relation to the total number of payment transactions continued to rise to just under 4% and 2%, respectively.

South Korea Small Flag South Korea

In Korea, the most commonly used payment method by individual customers for purchase of products and services is the credit card. This is mostly due to the regulation under the CFBA which stipulates that request for credit card transactions cannot be refused in Korea and tax benefits. However, recently the financial authorities are making efforts to diversify the payment settlement market with various payment methods such as QR settlement by utilizing Fintech technologies.

Iceland Small Flag Iceland

Iceland has generally been quick to adopt new methods in payments with card-based payments being the predominant payment method in consumer transactions. More recently mobile apps have become a commonly used payment method in Iceland. To use these apps, the user must link his card details (debit or credit card) to the app, creating a user profile. Once there, the user can pay, charge or split amounts, by using only cell phone numbers. These amounts are often trivial transactions such as when buying lunch, reimbursing gas money, splitting restaurant checks, etc. Furthermore, well known mobile solutions such as Apple Pay have recently been introduced in Iceland.

In larger transactions bank transfers are the predominant method of payment, a large majority of which is directly initiated by the end user through online banking portals.

Portugal Small Flag Portugal

Card-based payments, direct debits and bank transfers are the most popular and deeply-rooted payment methods in Portugal. Notwithstanding, we note that a recent surge in new payment apps has begun to gain traction (please refer to answer to question 19 below concerning the Mbway payment method introduced by SIBS and whose Application Programming Interfaces (APIs) other banks have also began implementing in their own systems, consisting in real-time instant bank account transfers).

India Small Flag India

(a) In the digital payments space, mobile pre-paid wallets have been one of the most popular payment instruments in India owing to ease of access and compatibility with both online and offline merchant establishments, thereby enabling subscribers to purchase a wide set of goods and services. Several technology platforms and e-commerce players, non-bank and banking entities have launched payment solutions in India. However, changes in law, especially those pertaining to KYC verification of customers, have resulted in increased regulatory compliance and associated costs for PPI issuers, resulting in several PPI issuers re-evaluating their business strategies and growth plans.

(b) UPI enabled payment solutions dominate the digital payment market today. Easily accessible technology, and universal remittance services associated with low costs have significantly contributed to the popularity of UPI based payment solutions in India. Increased KYC burden on PPI issuers, in light of recent regulatory changes, have also resulted in UPI enabled payments constituting a significant percentage of the customer to merchant and peer to peer remittance transactions in India.

(c) In addition to PPI wallets and UPI enabled payments, conventional payment methods such as debits cards and credit cards continue to play a significant role in the payments landscape in India. While card based payments have been one of the most popular payment modes for customer to merchant transactions in India, PPI wallets and UPI based payments are eating into their market share of digital transactions. As per the RBI, debit cards and credit cards made up to 25% of the payment system volumes in the financial year 2018-19, down from 29.9% in 2017.

(d) Debit cards and credit cards in India primarily operate on the global card networks provided by VISA, Mastercard, American Express, etc. A relatively newer entrant in the card payments landscape in India is the payment network operated by the NPCI – “RUPAY”. The Government of India’s policy to encourage digital transactions along with the issue of RUPAY cards for basic savings bank accounts promoted the use of RUPAY cards in the interior areas of the country, and has resulted in RUPAY acquiring a market share of more than 50% (by no. of cards issued) of the total debit cards issued in India as of March 31, 2019. In addition, other traditional modes of payment such National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), Immediate Payment Service (IMPS) also continue to play a significant role in the payments landscape in India.

(e) While digital payment systems have acquired an important role in the payments landscape in India, a substantial percentage of payment transactions in the country continue to rely on cash and other paper instruments (such as cheques, demand drafts, etc.). In 2012, India had a high cash circulation ratio (calculated as a percentage of the GDP) pegged at 11.59% of the GDP. While demonetisation and the Indian government’s impetus on digital transactions brought this number down to 8.70% of the GDP in 2016, cash in circulation increased to 10.70% of the GDP in 2017, indicating continued reliance on cash for payment transactions.

Peru Small Flag Peru

Cash payments are the most common in Peru. Credit and debit cards are also commonly used. Payment gateways and e-money businesses are beginning to emerge in Peru giving more Peruvians the option to make digital payments.

Israel Small Flag Israel

According to reports of the Bank of Israel for the year 2017, the volumes of transactions in each of the payment instruments were:

Checks: ILS 885 Bn (approximately 104 million checks and paper based payments).

Domestic non RTGS ETFs (Masav): ILS 3,149 Bn (approximately 371 million transactions).

Domestic RTGS ETFs (Zahav, excluding CLS): ILS 3,597 Bn (approximately 966K transactions).

Domestic RTGS CLS ETFs (Zahav): ILS 955 Bn (approximately 12K transactions). This activity is basically inter-banking activity only.

Credit card transactions: ILD 272 Bn (8.2 million active charge cards).

* please note that the Zahav RTGS system also serves payments in other payment systems (ILS 2,934 Bn in the year 2017) and payments of the Bank of Israel itself (ILS 140,460 Bn in the year 2017).

** Standing orders are usually cleared using Masav ETFs or credit card clearing.

*** the information does not include payments within the stock exchange settlement system.

Please note that these numbers refer to the total number and volume of the transaction in each payment system. These figures include inter-banking transactions. In many cases, a transaction in one type of payment means will trigger payment in other payment means as well (for instance: Masav ETFs among private users may trigger a Zahav ETF among the relevant bank; acquiring of credit card transaction will also lead to ETFs among the various participants (issuer, acquirer, card holder, merchant and their respective banks)).

The reports of the Bank of Israel indicate that since the year 2015 there is an increase in the volume of transactions made using charge cards and Masav ETFs, and a decrease in the use of checks and Zahav ETFs.

Until the year 2016 there was a moderate increase in the use of cash but this trend changes in 2017. In the year 2019, the Law for the Decrease of Use of Cash, 5778-2018 came into effect. This law limits the amounts that can be paid in cash among individuals and among merchants and is likely to decrease the use of cash even more.

The Netherlands Small Flag The Netherlands

The Dutch Payment Association regularly publishes factsheets and figures. The below numbers and percentages are based on their most recent publications (2018)(https://factsheet.betaalvereniging.nl/).

When discussing popular payment methods and payment instruments, a distinction should be made between in store payments and online payments.

In store payments
Next to cash payments (approximately 37% in store transactions were paid in cash), the most popular payment instrument for in store payments is the debit card via a ‘point-of-sale’ (POS) payment method (approximately 63% in store transactions were paid by using a debit card). Approximately 50% of the debit card payments made were contactless: generally a debit card holder can make up to 3 contactless payments in a row below a payment amount of €25 each without being requested to enter a pin-code. New technologies such as near field communication (built in in a debit card, but also nowadays more often in smartphones or smartwatches or via NFC tags enabling such contactless payments), e-wallets and other cloud-based payment methods are winning market share rapidly. ING and ABN AMRO recently announced the collaboration with Apple Pay as a new payment method available to their clients for in store payments.

Online payments
The most popular ‘payment method’ for online payments in the Netherlands is iDEAL. iDEAL was launched in 2005 by Currence as a joint initiative of eight Dutch banks. It has enjoyed phenomenal success: in 2018, approximately 524 million transactions were settled through iDEAL, with a transaction value of approximately €43 billion. iDEAL redirects a payer to its online banking environment. Approximately 70% of those iDeal payments were made via mobile banking applications (www.ideal.nl/actueel/kerncijfers/).

The second most popular payment instrument for online payments in the Netherlands is the credit card. According to the numbers published by the Dutch Payment Association, approximately 15% of the online payments included in those 2018 numbers were made by means of a credit card (compared to approximately 84% of online payments made via iDEAL).

Japan Small Flag Japan

The most popular payment method is definitely cash. According to "Cashless Roadmap 2019", a cashless payment related report issued by Payments Japan Association in April 2019, the rate of cashless settlements in Japan is 19.9% (which is very low compared to South Korea (96.4%) or the United States (46.0%)). Other than cash, the most popular payment methods are credit cards and prepaid instruments. To encourage more cashless payment, the Japanese government is encouraging consumers to use cashless payment methods by substantially reducing applicable consumption tax from 10% to 5% when consumers make payment by cashless means at certain qualifying stores from October 2019 to June 2020.

Jersey Small Flag Jersey

The most popular payment methods and payment instruments in Jersey are:

  • BACS [3] schemes:

    • BACS direct debits; and
    • BACS Direct credit scheme;
  • Faster Payments Service;
  • CHAPS payments;
  • SEPA payments; and
  • Cheques.

Whilst not a payment method, we note for completeness that SWIFT messaging is used for communications in relation to payments.

GBP is the main currency of payments and so BACS, CHAPS and Faster Payments are used more frequently than SEPA payments.

Liechtenstein Small Flag Liechtenstein

There are no specific statistics on the popularity of payment instruments in Liechtenstein. However, Switzerland, with its close ties and customs and currency treaty with Liechtenstein could be used as an indicator.

According to a Swiss study published in August 2019, the proportion of sales payments made with debit cards was 29%. In terms of total spending, the debit card ranks ahead of cash (27%) and credit cards (22%). The remaining 20 percent were accounted for by other means of payment such as bills (14.5%), internet payment methods (2.5%), merchant cards (2.4%) or mobile platform payments (1.7%).

Mexico Small Flag Mexico

Cash is still the most common payment method in Mexico for retail payments, owing to the fact financial inclusion has not yet reached acceptable levels —to put this in perspective, based on information of the CNBV, 78% of the adult population in Mexico is excluded from financial services— because of, inter alia, financial education and the inherent high costs or fraud risks of some of the non-cash payment alternatives (e.g. pre-authorised debits, cheques, payment cards, etc.); significant and inexpensive instruments have been developed recently, such as the Interbank Electronic Payment System or e-money ecosystems, the former of which is expected to be enhanced through the use of digital standardized requests to pay, e-money alternatives.

Luxembourg Small Flag Luxembourg

Like in other European countries, credit and debit cards are in Luxembourg a popular form of payment methods for either physical purchases in brick-and-mortar-stores or for online purchases. Furthermore, Luxembourg is amongst the countries with the highest rates of mobile payments. A prominent example in Luxembourg is Digicash /Payconiq. Besides, also foreign players have found their place in Luxembourg, such as Apple Inc. that made since mid-2019 their ApplePay service available in Luxembourg.

Malta Small Flag Malta

According to a survey conducted by the European Central Bank across the single currency area in July 2016, it was found that 92 per cent of the transactions in Malta involve coins and notes. To corroborate the popularity of cash as the favourite payment method in Malta, the latest statistics issued by the Central Bank of Malta in 2018 also show that cash was the most popular payment instrument. In this latest statistic it was also shown that credit or debit cards and cheques were the second most popular.

Malaysia Small Flag Malaysia

Payment methods that are most popular in Malaysia at present time based on surveys conducted are as follows, with examples:

A. Credit card channel

a. VISA

b. Mastercard

c. Amex

B. Internet banking services

a. Maybank2u

b. CimbClicks

c. HongLeong connect

C. E-wallet services

a. Alipay

b. Wechat Pay

c. Paypal

D. Payment over the counter

a. Cash payment

Singapore Small Flag Singapore

According to MAS, cash is the most popular payment method in Singapore.[3] Other payment methods include payment instruments such as cheques and cashier’s orders. Consumers also make payments with credit cards.[4]

However, as stated by MAS, there has been a recent surge in the adoption of digital payments and e-money offered by both banks and non-banks.[5] Recent examples include GrabPay, which is an e-money service in Singapore.

[3] Section 2 of “Payment Systems in Singapore”, published by MAS (available at https://www.mas.gov.sg/-/media/MAS/Singapore-Financial-Centre/Why-Singapore/Payment-and-Settlement-Systems-redirect-pages/EMEAP-Redbook-2011--Paymentclearing-and-settlement-systems-in-Singapore.pdf
[4] Section 2 of “Payment Systems in Singapore”, published by MAS (available at https://www.mas.gov.sg/-/media/MAS/Singapore-Financial-Centre/Why-Singapore/Payment-and-Settlement-Systems-redirect-pages/EMEAP-Redbook-2011--Paymentclearing-and-settlement-systems-in-Singapore.pdf
[5] Section 2 of “Payment Systems in Singapore”, published by MAS (available at https://www.mas.gov.sg/-/media/MAS/Singapore-Financial-Centre/Why-Singapore/Payment-and-Settlement-Systems-redirect-pages/EMEAP-Redbook-2011--Paymentclearing-and-settlement-systems-in-Singapore.pdf

Updated: November 11, 2019