Digitization & Online Payments in Greece

In a world that's rapidly embracing the digital era, how is Greece adapting? From cash as the primary means of payment to a swiftly developing digital landscape, the Greek economy is undergoing a period of transformation. 

This article examines the state of digitization in Greece, emphasizing the role of Small and Medium Enterprises (SMEs) and their adoption of online platforms, cloud services, and eCommerce. 

This is followed by an exploration of Greece's digital status quo, highlighting both successes and challenges, as well as its alignment with the European Union (EU) average across various digital domains. 

From websites to payment methods, the following sections provide an instructive insight of Greece's progress in building a digitally advanced economy.

Greece's Economy Is Dominated by Micro-Businesses

Greece’s economic system is similar to Spain’s in the sense that 99.9% of all Greek enterprises are SMEs. An SME employs up to 250 people and has an annual turnover of less than €50 million. According to the OECD, there are 718,558 companies in Greece that fall into this category. 

But that is not all – the majority of these companies are considered micro-enterprises with less than 10 employees (94.6%), making the Greek economy primarily characterized by smallscale enterprises. As larger companies tend to have more resources at their disposal to drive the implementation of newer technologies, this should alert us to the fact that most Greek companies will not have ready-made solutions at hand for their digital development.

Only 60% of Greek SMEs Had a Business Website in 2020

One indicator of basic digitization among enterprises is their web presence, i.e. whether they have their own website in order to increase their visibility and inform customers about their services and products in advance.  

As can be seen in the chart below, Greek SMEs are quite far behind the EU average when it comes to the share of them having a website in 2020. Only 60% of Greek SMEs reported having a website, placing Greece in second-to-last position, just 2 percentage points ahead of last place Portugal.

The EU average was at 76% of SMEs in 2020, closely followed by Spain and Ireland at 75% each. The countries with the highest website penetration among SMEs are Denmark (93%), Germany (88%), the Netherlands (84%), and the UK (83%). 

But having a website is only the first step in doing business online. The European Digital Economy and Society Index (DESI) measured the integration of digital technologies in Greek companies in 2022.  

One Fifth of Greek SMEs Sell Their Products Online

Digitization has become a pan-European effort, supported by several institutional development programs that provide grants, workshops and technology training to countries for the subsequent development of their digital capabilities. 

Greece is one of the countries that needed to improve its digital penetration, especially considering the high proportion of SMEs operating in the country. 

Looking at the DESI results, Greek enterprises are approaching the EU average of 66% in the use of ICT (Information and Communication Technology) for environmental sustainability, which can include paperless communication and saving energy costs through efficient, data-driven production.

Greek companies are in line with the EU average when it comes to using social media to promote their business, with 29% of companies engaging on at least one platform. 

The use of cloud services in Greece is at 17%, which is 17 percentage points below the EU average. However, with the expansion of Amazon Web Service (AWS) to Greece in 2021, this figure is likely to increase in the future. 

Interestingly, Greece exceeds the EU average by 2 percentage points in the share of SMEs using eCommerce, at 20%, but only 7% participate in cross-border eCommerce. This is slightly below the EU average of 9%, reflecting the general trend that SMEs tend to sell online within their home country. 

In terms of big data usage and eCommerce revenue as a percentage of total SME revenue, Greek companies are almost in line with the EU average, only one percentage point behind. The divergence is more pronounced when it comes to AI adoption, with Greece at 4% compared to the EU average of 8%. 

Beyond these newer innovations, there are existing digital technologies that add a layer of convenience, accessibility, and security to eCommerce. These primarily relate to digital payment methods, which we examine in more detail below.

Card Payments Lead Online Transactions in Greece

An analysis of the Greek eCommerce and payments landscape conducted by PPRO shows the most common payment methods for online transactions in 2022. It is clear that debit and credit cards are most widely used in Greece, as almost half of all online transactions are paid by this method.

The pandemic has had a major impact on this development, highlighting the need for contactless payments amidst recommendations for social distancing. Prior to the pandemic, cash was the preferred payment method for day-to-day transactions in Greece, according to an analysis by the European Central Bank (ECB).  

Correspondingly, cash is the second most common payment method in Greece, reflecting the predominance of cash payments in the country just a few years ago. 

eWallets, still a comparatively new phenomenon, are relatively well established in Greece, accounting for 16% of online transactions, which exceeds bank transfers by 7 percentage points. All other payment methods (including installments and cryptocurrencies) make up only 1% of all online transactions, in contrast to other regions where cash has primarily been replaced by new payment methods.

Greeks Prefer Easy Payment Options and Personalized Offers in eCommerce

Frictionless payments are a priority for consumers in Greece, according to 46% of respondents to Klarna’s 2023 survey. Personalized product recommendations were mentioned by an equal number of respondents (46%), while seamless omnichannel services (36%), virtual/augmented reality (30%), and a personalized service (29%) came in behind. 

Voice recognition technology was the least selected innovation, supporting the notion that consumers in Greece tend to be cautious about their privacy, as also seen in our insight into consumer preferences in Greek eCommerce. 

Another feature of the Greek market mentioned in our insight on Greek consumer preferences, and supported by the ECB study, is the prevalence of loyalty rewards. The ECB suggests that as merchants adopt digital payments in Greece, offering loyalty points for each completed transaction can be an effective way to incentivize Greek consumers to shop online.

Digitization & Payment in Greece - Key Takeaways

Greece’s move to digital is in line with pan-European efforts to take the continent’s burgeoning online economies to new heights. Although Greece has traditionally lagged behind the state of development of more advanced economies in the past, it is now slowly gaining traction.

• Micro-Business Dominance: Greece’s economic structure is primarily dominated by SMEs, particularly micro-businesses with fewer than 10 employees, which account for 94.6% of all businesses in the country. Given the typically limited availability of funds and human resources in smallscale businesses, this may indicate barriers to widespread digital development.

• Alignment and Divergence with EU: While Greece is closely aligned with the EU in areas such as social media engagement, big data, and eCommerce, it is lagging behind in aspects such as cloud services and AI adoption, although progress is being made. This is supported by EU reforms and includes development programs with subsidies, workshops, and digital literacy training.

• Digital Payment Transition: Cash was the dominant payment medium up until the pandemic. Now, however, cards have replaced it as the most common method of paying for online transactions. But eWallets are also on the rise in Greek eCommerce, reflected in consumer attitudes that see frictionless payment as the most anticipated innovation in online stores. 

Sources: Capital.gr - Digital Strategy Europe - ECB - EIT Digital - International Trade Organization - Klarna – OECD - PPRO