State secretary for finance: Hungary could save hundreds of billions by converting to cashless payments

The government’s financial awareness strategy aims to reduce the annual 450 billion HUF cost which cash payments impose on the economy

Cash payment systems cost Hungary’s national economy 450 billion HUF a year, which could be saved by converting to cashless payments.

State Secretary for Finance Ágnes Hornung said on Tuesday that the Financial awareness government strategy also gives priority to reducing costs.

The state secretary explained that in mid-2018, cash balances amounted to 5,000 billion HUF in Hungary, exceeding 14 percent of gross domestic product (GDP). Meanwhile, highlighting that value in the European Union is around 8 percent.

Apart from the significant costs, cash-based savings do not take part in financing the economy, Ágnes Hornung said, pointing out the negative impacts of the high cash ratio.

The government strategy aims to promote cashless payment instruments and the financial education of the youth, the state secretary said. The spread of electronic payments would also lead to the significant retreat of the cash-based black market, she added.

The Finance Ministry issued a tender for the preferential installation of POS terminals two years ago. By the end of the program, the POS terminal coverage of Hungarian shops will be almost 80 percent.

During the announcement made at the Sziget Festival, the state secretary said the event’s electronic payment system fits into the 7 years-long Financial awareness strategy.

Tamás Kádár, the festival’s lead organizer said that cashless payments were first introduced at Sziget in 2011. Since then, each year an average of 1 million transactions were made during the event.