Nontechnical summary
The digital transformation in banking and payments has important consequences for both the financial industry and consumers. Nevertheless, there has been limited empirical evidence about the diffusion of financial innovations among consumers in Austria. This paper presents the results of a representative survey that asked Austrians about their banking habits, their use of innovative payment methods and services/products (“fintech”) as well as their ownership and awareness of crypto assets. Thus, the survey results facilitate a stocktaking of consumers’ use and awareness of technological innovations both in banking and payments – which is important as digital innovations increasingly blur the dividing line between these two fields. This view is compared with information on consumers’ attitudes toward cash; this comparison is crucial because cash still plays an important role in Austria and in many other European economies. Moreover, the survey allows us to determine the share of Austrians that already use innovative products/services and also the share of those who have not come across or used innovations at all so far.
Overall, the results reveal a “digital divide” in the population with respect to banking and payment products. On the one hand, 58% of Austrians aged 14 or over use online banking, and 36% use their mobile devices for banking activities. One-third of Austrians visit a bank desk at most once a year. Contactless payments (without entering a PIN, for amounts of EUR 25 or less) are conducted by roughly one-half of Austrians. The use of several fintech services/products and ownership of crypto assets (2%) is confined to a much smaller share of Austrians. On the other hand, a share of 45% of the population still prefer to use cash for a payment of EUR 50, and 43% of Austrians visit a bank desk at least once a month.
Furthermore, we discuss the socioeconomic characteristics of users and nonusers of digital banking and payment services and conduct regressions to identify the drivers of adoption. We find that the key variables that determine the use of new products and services are trust in the safety of a product, age, financial risk tolerance and interest in technology. For instance, we find that the median age of digital banking and payment users is between 33 and 39. In contrast, persons that prefer cash are 56 years of age in the median. Moreover, our results show that the stated cash use among persons who pay already contactless is significantly lower than among those who do not pay contactless. These findings suggest that it is quite likely that the use of cash for transactions will decline in the near future, which would be in line with what we see in many other countries. Nevertheless, an overwhelming majority of Austrians hold a very positive view of cash and also want cash to remain.
