European residents are increasingly comfortable with digital and contactless payments, as the ongoing pandemic has made it the safest way to conduct transactions
Christine Lagarde revealed that an increasing number of people in the EU are becoming more comfortable with digital and contactless payments. She is the former head of the International Monetary Foundation (IMF) and the current president of the European Central Bank (ECB).
According to the head of the ECB, the current pandemic has seen consumers adopt digital payments in an unprecedented way, with a trend of continuous acceleration. Lagarde made that revelation when speaking at the Deutsche Bundesbank’s online conference yesterday on banking and payments in the digital world.
The ECB president also revealed that a panel of eurozone central bank officials would soon reveal her verdict on a European central bank (CBDC) digital currency. “The coronavirus pandemic (COVID-19) has accelerated this trend towards digitalization. E-commerce, which has grown steadily in recent years, increased by almost a fifth in terms of sales volume between February and June 2020, while in-store sales decreased ”, Said Lagarde.
According to the ECB president, e-commerce sales increased by almost 20% between February and June, despite the 1.2% drop in retail sales in the region. She added that the volume of online payments has had a double-digit growth rate since the pandemic broke out earlier this year.
The ECB is not the only financial institution to reach this conclusion. Last month, DBS Bank of Singapore mentioned that the ongoing Coronavirus pandemic has accelerated the move towards a society that depends less on money and more on digital payments.
ECB will move towards digitization
Lagarde admitted that Europe was left behind in terms of dominating payments on a global scale. “The lack of payment integration in Europe means that foreign suppliers have taken the lead”She added. As such, Lagarde supports the European Apex Bank in the development of a CBDC to facilitate the transition to digitalization. She also wants to see the region adopt faster and cheaper international payments.
Lagarde has always pledged to ensure that EU financial institutions adapt to the changing financial environment, becoming more friendly with cryptocurrencies. She said the EU had not yet decided whether to develop a digital euro, as it is currently exploring the risks, benefits and operational challenges of launching a CBDC.
Finally, the President of the ECB revealed that the results of the panel charged with studying the potential effects of a digital euro will be announced in the coming weeks.