##dotal or survey - based evidence tells that iceland is the most cashless society measured based on purchase value in shops. only about 9 % of the turnover is paid by cash. in iceland debit and credit cards are the main payment instruments at points of sale. a colder climate seems to promote the use of cards and other cashless instruments, as internationally low cash usage are found in nordic countries ranging from about 28 % in norway, 32 % in finland to about 37 % in sweden. surveys in belgium and holland report cash purchases ranging between 40 - 50 % of value, while southern countries show levels between 60 - 80 % or even higher. austria and germany are also traditionally cash - based countries. also the level of electronification in payments varies a lot among the eu15. most of the cashless account payments have paper - based and electronic versions. the electronification level is a measure of to what extent paper - based credit transfers and direct debits are replaced by electronic file transfers or internet e - banking initiation. it also captures to what extent slip - based card payments are modernised to eftpos - based, ( that's electronic funds transfers at point - of - sale - based ) electronic card payments. although all countries show increasing numbers of e - payments per inhabitant for the years 2002 - 2006 and most countries show an increasing level of automation, the actual variations between countries are very large. holland and finland seem to be the leading countries, only 3 - 4 % of transactions are initiated by paper formats. from the statistical data, we can conclude that there is a clear trend towards a cashless and e - payment based society among all eu15 countries. however, progress is quite slow and the use of cash currently seems to be decreasing at only 2 - 3 % a year. if this trend does not accelerate, the use of cash will remain dominant for many years, especially in the central and southern parts of europe. technology developments still, it would appear that we are approaching a turning point in payment practices. mobile terminals, mobile phones are fast becoming everybody's personal electronic device, and can perform an increasing range of services. in fact modern smart phones are small pcs with a wide set of input, output and communication features. these even surpass standard pcs in communication capabilities. true, they have somewhat lower processing capacity than standard pcs, due to the need to save on battery power. but this is not a barrier for payment processing as the capacity need there is

the proper price signals don't reach the end - users and thereby impede an efficient choice of payment instrument. so if we want to speed up development in payment services, we need to increase competition in the market and reduce the disincentives. based on our past finnish experiences in major payment innovations, i predict that the implementation and penetration of mobile payments among the general public will take its time following the introduction of a general and user - friendly mobile payment solution. our payment habits are deeply rooted. merchants need time to adapt their systems. banks want to be assured that the business model of the new payment instrument is a sufficiently rewarding opportunity for them. here too we face the traditional chicken - and - egg situation. still, i am convinced that recent developments in ict in general and in mobile technology in particular have provided a solid platform for building a new generation of payment technology. my forecast is that the convenience and efficiency of mobile payments will have general appeal among advanced users of mobile phones.