Hungary has long-term hopes of becoming a cashless society as part of its policy to boost financial literacy and save billions of Hungarian forints a year.
The move away from cash is a key component of government strategy, according to Gábor Gion, the Hungarian minister of state for financial policy affairs.
"A key task that lies ahead is reducing cash. Hungary's cash use is among the highest in the EU countries and that's something we need to tackle. Hopefully we can look forward to a cashless future," he said, speaking at the Euromoney Central and Eastern European Forum in Vienna on Jan. 15.
Agnes Hornung, Gion's predecessor, had spoken in 2018 about the need to decrease cash usage to reduce the size of the black economy, cut costs, increase financial literacy and discourage cash-based savings.
The negative impact that cash payments have on Hungary's economy are estimated at around HUF450 billion a year, according to August 2018 figures from the country's Cabinet Office of the Prime Minister.
The proportion of Hungarian adults who would choose not to use cash to make a payment if given the choice stood at 44% in July 2018, while 28% would prefer to use cash, according to research firm eNet and OTP Mobil. The remainder would be prepared to use either form of payment.
Sweden is widely thought to be the European economy that is the closest to going cashless, with cash making up only 13% of in-store transactions, according to a 2018 study by the Sveriges Riksbank.
The U.K. has also made strides toward going cashless, with some 34% of payments made in cash, although some commentators and analysts have expressed concern that the transition is happening too quickly and could lead to certain segments of society, such as the elderly and those with certain disabilities, being left behind.
As of Jan. 15, US$1 was equivalent to 283.71 Hungarian forints.