"Record High for Non-Cash Transactions in Latvia: Overwhelming Use of Digital Payments"
The latest "Payment Radar" published by Latvijas Banka reveals that non-cash payments held a 78% share in Latvia in February 2025, reaching an all-time high. In comparison to figures from February and August 2024, the proportion of non-cash payments has increased by 1 percentage point.
This data, collected via a survey by the market and social research agency SIA Latvijas Fakti, is published semi-annually on Latvijas Banka's website. It offers valuable insights into the money usage habits of the public in Latvia.
The ratio of non-cash to cash payments was first measured in February 2017, with non-cash payments comprising 58% and cash payments 42%. Since then, the share of non-cash payments has risen steadily, remaining around 77%-78% in recent years. The average number of payments per capita in a week was 14.1, down from 17.1 in February 2024 and 15.2 in August 2024, with 11 non-cash payments and 3.1 cash payments on average.
In terms of modern payment-related technologies, the use of contactless cards has slightly decreased, with 62% of the population using contactless payments daily in February 2025, down from 67% in August 2024 and 68% in February 2024. On the flip side, the share of smartphone payments has witnessed an increase, with 24% of the population making daily smartphone payments in February 2025, up from 22% in August 2024 and 23% in February 2024. In February 2025, 1% of the population used smartwatches for making payments.
Interestingly, 34% of the population used instant payments daily in February 2025, a slight drop from 35% in August 2024. Among the instantly-payment-aware population who took advantage of the option to enter the payee's phone number, 19% did so. Meanwhile, 51% were informed about the feature but had yet to adopt it.
Addressing the issue of currency counterfeiting, the latest statistics for 2024 show 1304 counterfeit euro banknotes and coins were detected in Latvia. Although the number of detected counterfeits has increased by 4% compared to 2023, the value of counterfeits dropped significantly by 30%. According to Aleksandrs Antiņš, Head of the Cash Technology Division at Latvijas Banka, the chances of encountering a counterfeit banknote or coin remain low.
A survey conducted by SIA Latvijas Fakti in February 2025 indicates that 59% of respondents consider euro to be a secure and difficult-to-counterfeit currency, while 25% believe otherwise. In August 2024, 57% of respondents claimed that euro was a secure currency, with 24% thinking the opposite.
In future developments, Latvijas Banka is working on the designs for the next series of euro banknotes, inviting the public to provide their opinions. The final designs will be selected, and the decision regarding when to produce and issue the new banknotes will be made in 2026.
Looking ahead, a requirement to verify the consistency between the payee and account number will come into effect across Europe on October 5, 2025. This mandate establishes rules and standards to verify the payee's details and account number prior to initiating a payment. This procedure does not affect the execution of the payment itself, with the payer receiving an informative alert notifying them of a discrepancy.
Latvijas Banka will ensure verification of the payee's name/company name against the specified payee's account number (IBAN). Starting in October 2025, Latvijas Banka will provide interested payment service providers from other European countries with access to its instant verification service.
This payee verification advancement is designed to reduce fraud risks and human errors in payment processing. It enables payment service providers to verify the alignment between the payee’s first and last names or company name, or the alignment of the identifier with the IBAN before authorizing the payment. This feature aims to enhance payment security and combat fraudsters.
Lastly, the digital euro project is gaining momentum. As October 2025 approaches, when the European Central Bank (ECB) will decide on the project's future, a survey reveals that 26% of residents plan to use the digital euro if it is introduced, while 42% say they would choose not to adopt it. The main advantages highlighted for those planning to use the digital euro are speed and convenience. For those not planning to use it, the main obstacle is lack of information and understanding.
- The surge in non-cash payments, reaching 78% and marking an all-time high, suggests a growing reliance on technology in personal-finance transactions within the Latvian business industry.
- The decrease in the use of contactless cards and the increase in smartphone payments indicate a shift in modern payment-related technologies among the population.
- The upcoming requirement to verify the consistency between the payee and account number aims to reduce fraud risks and human errors in payment processing, enhancing payment security and combating fraudsters.
- As the European Central Bank considers the future of the digital euro project, 26% of Latvian residents express interest in using it for speed and convenience, while 42% express concerns due to a lack of information and understanding.
