What if digital payments worked without internet?
The concept of an offline DigitalEuro offers a real breakthrough, enabling secure transactions without real-time internet — just like cash, but digital. A new study by De Nederlandsche Bank (DNB) — „The Offline Digital Euro and Holding Limits: A User-Centred Approach” — explores this promising feature in depth. Surveying 2,000 Dutch adults, the research found that: two-thirds are open to using an offline digital euro, most are comfortable with a holding limit of €3,000, trust and usability were key to acceptance. The survey revealed that a well-designed offline feature could make the digital euro more inclusive, resilient, and user-friendly — especially in everyday, low-value transactions.
Unknown does not necessarily mean unloved. DNB research shows that a majority of Dutch people would consider using the digital euro, should this digital counterpart to cash become available in the future.
Although the digital euro is not yet available as an actual means of payment, two-thirds of Dutch people are willing to use it. The digital euro would not jingle like coins or rustle like banknotes, yet it would have almost all the properties of cash. And like euro banknotes, it would also issued by a central bank.
EU Member States, the European Parliament and the European Commission are currently still negotiating legislation to make its introduction possible. Apart from giving the euro countries a contemporary counterpart to cash, it would also be the first pan-European digital retail payment method, providing a European alternative to the dominance of US-based companies on the European payments market.
Research into the use of the digital euro
There is still a lot to be done before we would actually have a digital euro in our pockets. The EU Member States, the European Parliament and the European Commission first have to approve the introduction of this new means of payment. When exactly this will happen and what the outcome will be is still unknown. In the meantime, the European Central Bank (ECB) and the national central banks in the euro area are working on technical, design and functional possibilities for this digital counterpart to cash.
While these technological and political developments are in full swing, DNB researched whether Dutch people are actually willing to use a digital euro. Two thousand people participated in a survey conducted by Flycatcher, a research agency that works with many Dutch universities. Participants were given an explanation in advance of what the digital euro, especially the offline digital euro (without internet connection), entails.
Cash, digital euro or debit card
The survey revealed that 67% of participants are willing to use the digital euro. That is quite impressive for a means of payment that is still in the planning stages.
DNB researcher Frank van der Horst explains how the survey was conducted. ‘Participants were allocated an amount of €800 or €3,000 to support themselves. Those two amounts roughly correspond to a monthly wage for people in lower and middle-income brackets. We also wanted to know whether income differences have an effect on the use of the digital euro.’
Like cash
Participants were asked to allocate their amount across three means of payment. One of the options was to leave it in their bank account and spend it with a debit card. They could also choose to divide the amount between digital euro and cash. The different features of the three means of payments were briefly explained to participants.
Van der Horst then explains what scenarios participants were faced with: ‘During the month, half of those surveyed were given 50% certainty they could use their debit card for their in-store purchases, such as groceries. The other half were given 99% certainty that they could use their debit card. We wanted to investigate whether the use of the digital euro would differ as a result,’ Van der Horst says.
More uncertainty, more digital euro
Regardless of the amount given or certainty whether participants would be able to pay by debit card, the willingness of participants to carry digital euro on them proved to be high. Another striking finding was that ‘As the uncertainty about whether or not you could use debit cards grew, people chose to keep not only more cash but also more digital euro in their pockets. They treated digital euro like cash,’ says fellow DNB researcher Anneloes van Gent.
Another key finding of this survey is that Dutch consumers generally have no problem with a ‘holding limit’ of €3,000 digital euro per person. Such a limit defines the maximum amount an individual can hold in order to prevent people from withdrawing digital euro to an extent that could threaten financial stability. No decision has yet been taken on the holding limit. This is also part of the political decision-making process concerning the possible introduction of the digital euro.
Digitally available, even offline
Van Gent continues: ‘In our research, we focused on the offline digital euro, which also works without an internet connection. That is where we see the real added value for the Netherlands. You can compare the offline digital euro to a picture on your phone – in contrast to a picture in the cloud. On your phone, you can access it any time. And because a digital euro is stored locally, no third party is involved in a payment. Only you and the recipient know about the transaction, so it is just as private as cash.’ In addition to using a smartphone to store digital euros, people will have the option of storing their digital euros on a payment card.
‘We think it is important for everyone to have easy access to this form of money,’ says Van Gent. ‘Everyone should be able to use the digital euro, including people with disabilities.’ The survey shows that 42% of participants would prefer to keep their digital euro on a payment card; 33% would prefer an app and 26% have no preference.
One third still reluctant
About a third of participants are reluctant to use the digital euro. People in this group, regardless of any budget or scenario constraints, do not use the digital euro in this research. A majority of these non-users indicated they do not see the added value of the new payment method. Privacy does not emerge as a decisive factor in this study. For two-thirds of Dutch people, privacy is not a reason to make more or less use of the digital euro. Nevertheless, as a central bank, we find privacy important.
About half of non-users said they have no need for the digital euro because they have insufficient knowledge about this means of payment. Others said they do not trust it as a means of payment.
European independence in payments
Payments are a basic necessity of the economy, and we want to make sure that we can always make payments. Here in the Netherlands, we rely heavily on global players from outside Europe for our electronic payments.
The companies behind the Dutch debit card payments are Mastercard and Visa, for example. Other big players in Europe are Paypal and Apple. ‘There is still no European retail payment solution that connects all European markets – and that’s what we need to ensure our independence. It is one of the main reasons why we are working on the digital euro,’ says Van Gent.
But we need political approval before we can introduce a digital euro, whether online or offline. For the researchers, it is all the more encouraging that the lion’s share of prospective users take the payment method seriously.
More details here: The offline digital euro and holding limits: a user-centred approach
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