Greece, a country in the eastern Mediterranean and member state of the EU, uses traditional and emerging payment methods. Historically, the nation has relied heavily on cash transactions, but that could be changing. For example, the European Central Bank (ECB) reported that cash payments as a share of all point-of-sale (POS) transactions in the country fell from 88% in 2017 to 62% in 2022. Meanwhile, digital adoption is increasing. In 2023, more than 15 million debit cards were in circulation in a country with a population of just under 11 million—a testament to Greek customers’ changing payment preferences.

Government incentives aim to promote transparency and combat tax evasion. Electronic payments can enable tax cuts for customers, a policy likely contributing to the growing comfort with digital transactions. But customer confidence remains a concern. After the financial crisis, the public’s trust in banking and digital mechanisms decreased, influencing customer behavior even now. Below, we’ll cover best practices for entering Greece’s payment market, including:

• Understanding local payment preferences
  
• Complying with regulations
  
• Using strong security measures
  

The state of the market

Technological advancements are contributing to changes in payment preferences. One driving force has been the increased use of POS terminals across the country. The number of POS terminals more than tripled from 2015 to 2018, with more than 690,000 devices in active use in 2018. Developments in contactless technology have also contributed, enabling quicker, more convenient payment processes. Mobile banking and payments are also increasing, with many of Greece’s major banks launching digital platforms and apps to cater to an increasingly tech-savvy populace.

A shift in customer behavior has accompanied these technological developments. ECB data shows that in 2022, only 24% of Greek customers said they preferred to pay in cash. They still rely on cash for small transactions, especially in local markets and among certain demographics, but a growing portion of the population is using electronic methods for higher-value purchases and in urban settings.

The Bank of Greece maintains the nation’s financial stability and leads monetary policy, and the Hellenic Capital Market Commission regulates the Greek securities market to protect investors and ensure market transparency. Both entities operate under the Ministry of National Economy and Finance, which oversees the country’s economic strategy and fiscal policies. As part of the EU, Greece also follows broader EU guidelines, particularly regarding the Single Euro Payments Area (SEPA) and the General Data Protection Regulation (GDPR).

Payment methods

Though Greek customers are fond of local payment methods, they regularly use internationally popular payment methods.

Usage

In Greece, cash transactions have historically been dominant, with the ECB reporting that 62% of all POS transactions in 2022 were conducted in cash. Though this is changing, it’s important to recognize that many Greek customers feel comfortable using cash payments. Accommodating this preference by providing cash-on-delivery options, particularly for ecommerce businesses, can resonate with a significant segment of the population.

Contactless payments are increasing in popularity, especially among the younger demographics, who are often more tech-savvy and focused on speed. This trend also supports a shift away from carrying physical wallets. The convenience of contactless payments has made them a popular choice for smaller, everyday transactions, whether at grocery stores, cafés, or kiosks.

The rise of mobile payments in Greece mirrors the global trend, but local dynamics have accelerated it. Customers, especially younger people, often use mobile payments for day-to-day transactions, whether at local eateries, grocery stores, or with friends. This shows that they value the technology’s convenience and trust its security measures. But for transactions of greater value, a substantial portion of Greeks still prefer conventional payment methods.

Credit cards are widely used and accepted in Greece, especially in urban areas and tourist destinations. Though some smaller establishments and taverns were cash only, many of them are adopting card payment systems. The move toward a digitally backed economy, combined with increased internet penetration, has also expanded online shopping, increasing online card payments.

Popular B2C payment methods in Greece

• Cash
  
• Credit cards
  
• Debit cards
  

Popular B2B payment methods in Greece

• Bank transfers (e.g., SEPA Direct Debit)
  
• Credit cards
  

Trends

Compared with its neighbors, Greece has adapted more slowly to digital banking and online payment solutions. The Ministry of Digital Governance was created in 2011 to help Greece adapt to an increasingly digital world. During the COVID-19 pandemic, the ministry ramped up efforts to offer governmental services online. Challenges remain because of a lack of digital literacy among the public, but investments in digitization are part of a promising trend.

Adoption of fintech solutions in Greece is increasing, with startups and established institutions exploring digital avenues to enhance financial operations. This amount of interest is similar to that seen in countries such as Estonia and Lithuania, which are known for their vibrant fintech fields and innovative solutions.

Ease and friction of entry

As you plan your market entry for Greece, research the tax implications and processes for disputes and chargebacks.

Taxes

The value-added tax (VAT) rate in Greece is 24% for most goods and services, with reduced rates of 13% for most food items and 6% for certain medicines. Customers pay VAT in the final price of products or services, while businesses collect and remit the tax to the government. Mistakes or misconduct can lead to serious repercussions such as audits and penalties.

Chargebacks and disputes

The country’s approach to chargebacks and disputes follows EU directives and local commerce rules. Businesses operating in the Greek market should remain informed about European and local regulations and prioritize building strong relationships with their customers to minimize disputes. Staying up-to-date and being proactive in dispute management are key to success.

Greece adheres to the revised Payment Services Directive (PSD2), which emphasizes customer authentication. This provision is often central to dispute resolutions: transactions authenticated under the requirements of PSD2 have a higher level of verification, which can make them more defensible against chargeback claims.

Greece also follows SEPA regulations for chargebacks related to direct debits. Under these guidelines, customers are entitled to a refund for any direct debit transaction if they request it within eight weeks.

Given the customer-focused nature of chargebacks and disputes in Greece, businesses need to focus on preemptive measures. Practices such as clear communication with customers, detailed recordkeeping, and the use of advanced transaction verification can reduce disputes. Collaborating closely with payments service providers can also give businesses insight and tools to better manage and potentially reduce chargeback incidents.

International payments

As part of the euro area, Greece uses the euro as its official currency. But businesses should prepare for certain factors regarding international payments in the country. Here’s how international payments work in Greece:

• Currency conversion: Greece is a top tourist destination in Europe. Travelers from outside the region often convert their home currencies to euros. That process typically occurs through financial institutions, exchange bureaus, and ATMs. Though the exchange rate markups at these outlets might vary, they typically range from 1% to 3% of the transaction. Some establishments also charge a flat fee, commonly €3 to €7, for conversion services. ATMs across Greece might offer foreign currency withdrawals for a service fee that can range from €1.50 to €4 per transaction. The country has several popular third-party currency conversion services, including Viva Wallet, Wise (formerly TransferWise), and the comprehensive services offered by Piraeus Bank, one of Greece’s largest banks.

• Trade partnerships and financial ties: Germany, Italy, and Cyprus are among the country’s top trading partners. Germany is a major importer for commodities including machinery, vehicles, and chemical products. Italy and Greece share a significant trade volume, specifically in mineral fuels, machinery, and pharmaceuticals. Beyond their shared cultural ties, Greece and Cyprus also have a vibrant trade relationship, especially in sectors such as machinery, transport equipment, and manufactured goods. These strong trade relationships necessitate the creation of efficient payments infrastructure between Greece and its trade partners.

• Accepting multiple currencies: A growing number of Greek businesses are adopting multicurrency capabilities, especially those that cater to an international clientele. These features let customers view prices and make payments in their preferred currencies. Conversion rates are determined at the transaction’s POS and often involve a fee, which tends to be 1% to 3%. Depending on its strategy, the business or the customer will pay this fee.

Security and privacy

Because of the financial crises of the past decade, Greece emphasizes transparency, data protection, and security protocols while aiming to facilitate business for local and foreign enterprises. Here’s a look at some factors:

• Data protection laws: At the forefront of data protection in Greece is the GDPR. This law has rigorous measures to ensure the safety of personal data, granting individuals rights over their data that include access, rectification, and the right to request its erasure—the “right to be forgotten.”

• Bank of Greece: The Bank of Greece regulates and oversees payment and electronic money institutions. It sets the standards for establishing these institutions, ensuring they meet capital requirements and maintain transparent operating procedures. It conducts regular audits and inspections to affirm adherence to these standards.

• Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF): Like many European countries, Greece abides by the EU’s AML and CTF directives. These regulations mandate financial institutions adopt comprehensive due diligence processes, monitor transactions, and report any suspicious activities. This commitment strengthens Greece’s international reputation and relations with other financial markets.

• Hellenic Data Protection Authority: This is an independent authority that oversees the application of data protection laws in the country. It has the power to investigate violations, impose administrative sanctions, and protect individuals’ data rights.

Key success factors

Though Greece is modernizing its payment systems, it still faces challenges rooted in its economic history, customer behavior, and regulatory environment. Recognizing and addressing these issues is important for businesses operating in or with Greece. These are some considerations to remember while planning your market entry:

• Slower pace of digital payment adoption: Though many European nations have adopted digital payment methods quickly, Greece has been somewhat more reserved. However, according to ECB data, 50% of the population would prefer to pay with a card or other cashless payment method. These dual preferences pose challenges for businesses that want to simplify their transaction methods.

• Lasting impact of the financial crisis: The Greek financial crisis has had a lasting impact on the banking system. Trust in financial institutions declined, which has consequences for payment systems. Customers might be wary of newer, less familiar methods, preferring to use more traditional payment methods.

• Dependence on cash: Despite advances in digital payments, cash is still dominant in Greece. This strong reliance on physical currency creates operational challenges for businesses that want to simplify their payment processes or integrate with international platforms that favor digital transactions.

• International payments: Though SEPA has simplified transactions within the EU, payments beyond the EU’s borders present challenges. Businesses often face issues such as fluctuating exchange rates, different regulatory environments, and additional transaction fees.

Key takeaways

Recognizing the unique context of Greece’s payment systems while addressing changing trends will be key to refining customer payment processes. Here are top takeaways about payments in Greece:

Understand local payment preferences

• Implement digital and mobile payments: Despite the prevailing use of cash, digital payment adoption is increasing. Integrating widely accepted electronic payment methods such as credit cards and digital wallets can cater to this growing customer segment.

• Manage card payment disputes: With the rise in card and online payments, there’s an increased focus on transaction disputes. Though the percentage might seem small, it can be substantial given the large transaction volumes. Handling these disputes requires businesses to have recordkeeping systems, which increase the complexity of their operations.

• Localize payment interfaces: Though many Greek people speak English, offering payment interfaces in Greek can make the payment process feel more intuitive and familiar. Beyond just language translation, localization is about integrating cultural nuances and regional specificities that can make the transaction process more relatable.

Comply with regulations

• Comply with the GDPR: As part of the EU, Greece follows EU regulations, including the GDPR. Adhering to these stringent data protection regulations requires businesses to make significant investments in their infrastructure. The challenges are particularly pronounced for payment platforms, given the sensitivity of financial data. Noncompliance can lead to substantial penalties of €20 million or up to 4% of a business’s global annual turnover.

• Know the role of SEPA: As part of the euro area, Greece is inherently linked with other European countries through SEPA, which facilitates euro-denominated bank transfers. This connection ties Greece closer to countries such as Germany, France, and the Netherlands, enabling smoother cross-border transactions and trade.

• Be aware of cross-border complexities: Though SEPA has simplified payments within the EU, businesses should be aware of the potential complexities of transactions beyond the EU such as fluctuating exchange rates. Solutions that offer real-time exchange rate calculations can make these transactions more transparent for customers.

Employ strong security measures

• Use Strong Customer Authentication (SCA): PSD2 mandates that payments service providers in Greece implement SCA, which requires electronic transactions to be processed with at least two out of three possible authentication methods—something the customer knows, something the customer has, and something the customer is.

• Know the role of payments service providers: Businesses operating in the payment sector fulfill and often exceed the basic regulatory requirements. By using advanced technologies, they can detect unusual patterns to protect businesses and customers from potential fraud.

• Build trust through cybersecurity: After the financial crisis, trust in banking and digital transactions declined. Integrating payment gateways with strong reputations in Greece can help address this trust gap. Displaying security certificates and using recognizable payment intermediaries can also help alleviate customer apprehension.