The index, which assesses the development of digital payments, highlights the growing trust in cashless technologies and the increasing use of mobile wallets, but also underscores the ongoing dominance of cash, albeit with a shrinking margin. Despite significant advances, cash remains a favored method of payment for many, but its dominance is waning as digital payment technologies gain more trust and traction among consumers.

The Index is built on three pillars: infrastructure, usage, and knowledge. In 2023, growth was driven primarily by advancements in infrastructure and usage, both of which increased by two points. Infrastructure rose from 76 to 78 points, while usage increased from 52 to 54. Notably, there has been a slight decline in the knowledge pillar, falling from 55 to 54 points, indicating that while the use of digital payment technology is growing, the knowledge gap remains a challenge, especially among certain demographics.

The report stresses the need for targeted financial education, particularly focusing on less educated, lower-income consumers and older age groups, in order to close the digital divide. As technology evolves rapidly, these groups often lag behind in terms of understanding and utilizing the latest digital payment solutions.

Infrastructure Expansion

Innovative payment solutions such as QR code payments, payment requests, and mobile terminals have contributed significantly to the growth of Hungary’s digital payment infrastructure. However, the impact of the nationwide instant payment service launched in September 2024 is not yet reflected in the 2023 data. The anticipated further expansion of QR code payments is expected to show in the 2025 Index.

Despite the rapid spread of terminals, around half of Hungarian businesses still do not offer card payment options. This indicates considerable potential for expanding the point-of-sale (POS) infrastructure, particularly among micro-merchants and sole proprietors. QR code payments and wearable device payment solutions saw significant growth in 2023.

Knowledge Gaps and Financial Education

While consumers are becoming more comfortable with digital payment methods, particularly in terms of security, challenges remain. The report highlights that four out of five cardholders save their card data for online payments, but the use of advanced encryption methods, such as card data tokenization, remains limited.

There is a clear correlation between higher education levels, economic status, and knowledge of digital payment systems, with a growing gap between those at the top and bottom of the economic spectrum. Addressing this gap through targeted financial education is key to further fostering trust in digital payment systems.

Digital Payment Usage on the Rise

The usage pillar saw steady growth, particularly in contactless payment solutions, which have become nearly ubiquitous, with 99% of transactions being contactless. Mobile wallet usage, which has increased by 6% since 2022, continues to expand, though innovative payment methods like installment payments and QR codes remain less commonly used.

“Both the numbers and the underlying reasons and trends clearly indicate that progress in financial digitalization currently depends largely on strengthening the knowledge pillar, that is, closing the gap between knowledge and opportunity. The main conclusion of the newly published Digital Payment Index is that further development will largely depend on how effectively market players and regulators can build trust in new technologies through education,” said Gergely Márkus, country manager for Mastercard Hungary and Slovenia.

He added that aligning knowledge with the opportunities provided by infrastructure will become the primary driver of payment digitalization.