Christine Lagarde, the European Central Bank's president and former International Monetary Fund chief, said Europeans are adopting digital payments faster as the coronavirus pandemic makes them the sa
Christine Lagarde, the European Central Bank's president and former International Monetary Fund chief, said Europeans are adopting digital payments faster as the coronavirus pandemic makes them the safer choice. She made the comments during an online conference hosted by Deutsche Bundesbank on banking and payments in the digital world.
Between February and June, e-commerce volume jumped nearly 20 percent while retail sales fell 1.2 percent across the EU. Online payment transactions have grown at double-digit rates since the pandemic began.
"The coronavirus (COVID-19) pandemic has accelerated this trend towards digitalisation. E-commerce, which has grown steadily in recent years, increased by almost a fifth in terms of volume of sales between February and June 2020, while in-store sales declined," Lagarde said.
Other banks saw the same shift. Singapore's DBS Bank noted last month that the pandemic has driven movement toward digital payments and away from cash.
Foreign payment providers dominate in Europe, a situation Lagarde attributed to the lack of payment system integration. "The lack of payment integration in Europe means that foreign providers have taken the lead," she said. She supports developing a central bank digital currency to modernize the region's financial systems and enable faster, cheaper cross-border payments.
The EU has not committed to a digital euro. Eurozone officials are studying the risks, benefits, and operational challenges of launching a CBDC. Lagarde said a panel of central banks will announce its findings in the coming weeks.
