Ratio of non-cash to cash payments in Latvia: 74% to 26%

2025-10-03
Latvijas Banka

The most recent (autumn 2025) "Payment radar" published by Latvijas Banka suggests that the ratio of non-cash to cash payments in Latvia was 74% to 26% in August 2025. Cash has regained its popularity and is catching up with the August 2023 level (27%) after the record-high non-cash payments ratio (78%) observed in February 2025.

The "Payment radar" outlines the latest information on the money usage habits of the public in Latvia. This information has been obtained from the results of a public survey conducted by the market and social research agency SIA Latvijas Fakti. The "Payment radar" is published semi-annually and is available on Latvijas Banka's website (https://www.bank.lv/en/operational-areas/payment-systems/payment-radar). The development of the ratio of non-cash payments to cash payments and interaction between them (as at August 2025) is the central measurement of the overview, supplemented by more detailed numerical information and expert commentaries.

Ratio of non-cash to cash payments

The ratio of non-cash to cash payments was first measured in February 2017, with non-cash payments constituting 58% and cash payments 42%. Since then, the share of non-cash payments has gradually risen and in recent years has remained stable – above 75%.

In August 2025, the average number of payments per capita in a week was 17.9 (14.1 and 15.2 in February 2025 and August 2024 respectively), including 13.3 non-cash payments and 4.6 cash payments.

Payment-related modern technologies

According to the "Payment radar", the use of advanced technologies in the payment sector slightly decreased over the past six months. The share of payments made with contactless cards has slightly shrunk (in August 2025, they were regularly used by 58% of inhabitants, while in February 2025 – 62%, and in August 2024 – 67%). The share of payments made with smartphones has also decreased (in August 2025, they were regularly used by 20% of inhabitants, while in February 2025 – 24%, and in August 2024 – 22%). In February 2025, 2% of the population used a smartwatch for making payments.

In August 2025, 38% of the population used instant payments on a daily basis (a slight decrease from 34% in February 2025). In August 2025, 22% of the population who regularly used instant payments and were aware of this feature took advantage of the possibility to make payments by entering the payee's phone number. Meanwhile, 41% were informed about this feature, but did not use it yet. In February 2025, 19% of the respondents used this option, while 51% were aware of it, but had not yet used it.

Critical financial services and digital euro

In the commentary section of the "Payment radar", Reinis Vecbaštiks, a Modern Payments Expert of Latvijas Banka, speaks about the critical financial services and the potential introduction of the digital euro that would increase the security. The purpose of critical financial services is to give the public access to their money and enable payments during crises (of late, this is understood as a war, but crises can vary, for example, floods, power supply disruptions).

"From the point of view of payment resilience, it is natural that a wider choice of options increases public security. The range of options can also be expanded individually by relying not only on centralised solutions, but also by maintaining sufficient cash reserves to be able to purchase staples for the family for several days. At the same time, a physical payment card should also be kept handy. For security reasons, accounts can be opened with several payment service providers (for example, in multiple banks)," underlines Reinis Vecbaštiks.

The digital euro is one of alternative future solutions – its main purpose is to strengthen payment resilience. If the decision to introduce the digital euro is made, it is expected that the digital euro will also be available for offline use to store the funds in a smart device (for example, a smart phone or smart card) and to make instant payments.

Time to choose the new euro banknote design is approaching

Jānis Blūms, the Head of the Cash Department of Latvijas Banka, informs that active preparations are ongoing for the new third series of euro banknotes to be put into circulation in the next few years. This is a multi-stage process, and the selection of the design of new banknotes is currently ongoing.

This year, the European Central Bank (ECB) launched a competition for the design of the future euro banknotes and invited designers and artists residing in the European Union to participate. The application deadline expired in August, and artists who will be invited to participate in designing the banknotes are expected to be selected in October. The competition will end in June 2026, and it will be followed by a public survey organised by the ECB to gather public opinions on design proposals selected for the final stage. By the end of 2026, the Governing Council of the ECB will announce the final design of the future euro banknotes. It will serve as a starting signal for preparatory works to put the third series of euro banknotes into circulation.

Currently, two potential themes of the new banknotes are being developed: the "European culture" and "Rivers and birds". The motifs used for the "European culture" will include various cultural events and facilities, as well as important contributors to the European cultural heritage. The theme "Rivers and birds" highlights the importance of the European nature and its protection.

"This is a crucial message on cash that reiterates the commitment of Latvijas Banka and the ECB not only to maintain cash, but also to develop it as a means of payment to make it more accessible and secure. In terms of economic security, the geopolitical developments underline the relevance of cash. Thus, it is even more important to address public concerns about the future of cash," underscores Jānis Blūms.

Very soon Bulgaria will become the 21st euro area Member State

Antra Trenko, an expert of Latvijas Banka, informs that as of 1 January 2026 Bulgaria will become the 21st Member State of the euro area. The fixed exchange rate is 1.95583 leva = 1 euro. According to the initial plan, Bulgaria had to introduce the euro already in 2024, but this transition was postponed due to the excessive inflation.

The national currency lev and the euro will both circulate in parallel for a month, i. e. until the end of January 2026. After this date, payments will be made only in euro. Exchange of the banknotes of the national currency to the euro without any commission will be possible not only at the central bank, but also in commercial banks and postal offices for six months after the euro introduction date. After that, the exchange will be possible at the National Bank of Bulgaria without any time limitations and free of charge.

Like in other euro area countries, Bulgaria has chosen to mint its euro coins with significant national symbols. Bulgarian euro coins will be adorned with a Madara Rider (Мадарски конник), and the saints of the Bulgarian Orthodox Church. This will be the first time, when euro coins will feature orthodox Christian motifs. Everyone is invited to examine the new euro coins.

"Latvijas Banka congratulates Bulgaria on this important step. The introduction of the euro is not only an economic development, but also a brave step towards a better future, a vote of confidence on the European values, and a testament to the resilience and ambition of this country. For Bulgaria, the euro is not only a currency, but also a story of progress, identity, and persistence. Bulgaria's accession to the euro area demonstrates the resilience and development of the euro area – Bulgaria will become the 21st country with the single European currency," writes Antra Trenko.

COMMENTARY SECTION

The "Payment radar" features several commentaries on cash circulation-related topics relevant to the public. Reinis Vecbaštiks, a Modern Payments Expert of Latvijas Banka, offers commentary on the latest news on the critical financial services and the digital euro; Jānis Blūms, the Head of the Cash Department of Latvijas Banka, – on the development of the new euro banknotes; and Antra Trenko, an expert of Latvijas Banka, – on the expansion of the euro area as of 1 January 2026.

Public safety in money matters: critical financial services and the digital euro

Reinis Vecbaštiks, Modern Payments Expert

In our daily lives, we tend to think about the importance of payments only when something happens and payments are no longer possible. While everything runs smoothly, we take it for granted that physical or electronic payment cards in smart devices can be used to make any purchase quickly, securely and without difficulty. However, with increasing reliance solely on digital solutions, we become dependent on external factors such as internet and power connections.

Several recent developments like the invasion of Russia in Ukraine, various climatic events in Europe and elsewhere, and power supply interruptions in the Southern Europe make us reconsider the resilience of our payment options. Latvijas Banka and the former Financial and Capital Market Commission started focusing on these matters more than five years ago, and in 2023, considering the current issues, the list of critical financial services to be provided by commercial banks with the largest market share (AS Swedbank, AS SEB banka, AS Citadele banka, and the Latvian branch of Luminor Bank AS) was reviewed.

The purpose of critical financial services is to give the public access to their money and enable payments during crises (of late, this is understood as a war, but crises can vary, for example, floods, power supply disruptions). We invite everyone to read the section on critical financial services on Latvijas Banka website. Please do that before a crisis strikes to reflect on what you and your family will do and how you will prepare for potential challenges.

Though the share of cash in daily payments in Latvia is 26%, we are well aware of its importance in the context of economic security. As a result, in recent years its access infrastructure, i. e. the network of ATMs, has been strengthened. ATMs of critical importance have been established: they will have continuous power supply and communications, and in case of a crisis, will be replenished with cash as a priority. However, as we have also seen in Ukraine, reliance on just cash alone will not suffice when a large or prolonged crisis strikes as transporting the cash and accessing ATMs can become dangerous. Thus, backup digital solutions are also needed.

In this regard, Latvijas Banka has outpaced other central banks by introducing offline card payments in cooperation with market participants and providers of critical services. This will allow to pay for basic goods to specific merchants even during temporary disruptions of the payment card infrastructure. However, this option will be available only if the card is physically inserted in a payment terminal and a PIN code is entered. Thus, Latvijas Banka still recommends to keep the payment card handy and use it occasionally rather than solely rely on mobile solutions. Currently, we continue to engage with retail and pharmacy networks (the necessary action has already been taken in petrol stations) to ensure reasonable availability of this service across the entire territory of Latvia.

From the point of view of payment resilience, it is natural that a wider choice of options increases public security. The range of options can also be expanded individually by relying not only on centralised solutions, but also by maintaining sufficient cash reserves to be able to purchase staples for the family for several days. At the same time, a physical payment card should also be kept handy. For security reasons, accounts can be opened with several payment service providers (for example, in multiple banks). The digital euro is one of alternative future solutions – its main purpose is to strengthen payment resilience.

In developing the digital euro, resilience-by-design was defined as one of the principles of the European Central Bank (ECB). If the decision to introduce the digital euro is made, it is expected that the digital euro will also be available for offline use to store the funds in a smart device (for example, a smart phone or smart card) and to make instant payments. It is planned that the offline payments with the digital euro will be enabled by the Near Field Communication (NFC) technology. This would be an advantage over currently offered solutions that require a physical insertion of a payment card in a payment terminal.

It is important to note that the digital euro would be stored in the Eurosystem (the ECB and the national central banks) infrastructure and that individuals would not be bound to a single bank or payment service provider. If one bank becomes unavailable, the user would be able to access their money in the Eurosystem infrastructure and use them for purchases via another intermediary by providing technical proof or a "password".

It is almost impossible to accurately forecast future crises, their nature, and their impact on various areas of life, including payments. From the point of view of the central bank, the best approach to preparing for them is to develop several alternative crises solutions. Whereas residents are invited to explore these solutions to be able to make more informed and prudent decisions when the chaos and perturbation strike.

Time to choose the new euro banknote design is approaching

Jānis Blūms, Head of the Cash Department of Latvijas Banka

Active preparations are ongoing for the new third series of euro banknotes to be put into circulation in the next few years. This is a multi-stage process, and the selection of the design of new banknotes is currently ongoing. What's new, and what will happen next?

By the end of 2026, the Governing Council of the ECB will announce the final design of the future euro banknotes. It will serve as a starting signal for preparatory works to put the third series of euro banknotes into circulation.

This is a crucial message on cash that reiterates the commitment of Latvijas Banka and ECB not only to maintain cash, but also to develop it as a means of payment to make it more accessible and secure. In terms of economic security, the geopolitical developments underline the relevance of cash. Thus, it is even more important to address public concerns about the future of cash. Of late, stories in both the media and on social networks have stirred public worry about this topic.

We will ensure that the public continues to enjoy access to various means of payment. The digital euro is not intended to replace cash – just the opposite, it aims to complement potential choices for the businesses and the general public. In fact, it will be a new type of money with the same advantages as cash, and it in no way means that those who prefer cash will have to change their habits. There was, is, and will be cash, as long as the public demands it.

The people of Latvia will also have a say in how our future money – the third series of euro banknotes – will look like. Follow updates from Latvijas Banka and the ECB not to miss the survey on the new design of euro banknotes in 2026. Every vote counts!

Accession of Bulgaria: a new chapter in the history of the euro area

Antra Trenko, Expert of Latvijas Banka

Bulgaria is one of the oldest countries in Europe that has managed to maintain its original name since 681 A.D. Its history is very interesting, but complex. Bulgaria's road to euro – one of the most important developments in its modern history – started more than 20 years ago, when in 1999 the national currency lev was pegged to the euro.

In the current world ridden with geopolitical and economic risks, Bulgaria's progress towards closer integration in the economic and political core of Europe is a natural choice. Thus, accessing the euro area will bring not only greater financial stability and better investors' confidence to Bulgaria, but also will allow it to have a greater say in policy-making in the European Union (EU).

Bulgaria joined the EU in 2007.

After almost two decades in the EU and despite various internal political developments, Bulgaria will become the 21st Member State of the euro area on 1 January 2026. The fixed exchange rate is 1.95583 leva = 1 euro. It should be noted that according to the initial plan, Bulgaria had to introduce the euro already in 2024, but this transition was postponed due to the excessive inflation.

However, like any major change, the introduction of the euro in Bulgaria faces challenges. A half of the Bulgarians are cautious or sceptical, as they fear high inflation and price hikes. These concerns are aggravated by disinformation and the uneasy national political situation. Uncertainty was further increased by pro-Russian and nationalist forces that repeatedly tried to undermine Bulgaria's accession to the euro area. Experience of other countries, including Latvia, suggests that there are no economic grounds for fearing price increases after accession, while being in the euro area shelters from external shocks.

After Bulgaria's accession to the euro area, not only banknotes, but also coins will bear a text in Cyrillic, i. e. the word "евро" on 1 and 2 euro coins. As a result, these coins will stand out among the euro coins of other euro area countries. The edge of coins will be adorned with words in Cyrillic "БОЖЕ ПАЗИ БЪЛГАРИЯ" (God Protect Bulgaria).

Latvijas Banka congratulates Bulgaria on this important step. The introduction of the euro is not only an economic development, but also a brave step towards a better future, a vote of confidence on the European values, and a testament to the resilience and ambition of this country. For Bulgaria, the euro is not only a currency, but also a story of progress, identity, and persistence. Bulgaria's accession to the euro area demonstrates the resilience and development of the euro area – Bulgaria will become the 21st country with the single European currency. Добре дошли в семейството на страните от еврозоната!

The sociological survey data and detailed information are available at https://www.bank.lv/en/operational-areas/payment-systems/payment-radar.