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Germans are poorer than Italians and French

Germans are poorer than Italians and the French, despite living in Europe’s biggest economy and bailing out struggling southern European countries.

Published: 10 October 2013 08:30 CEST

Germans are poorer than Italians and French

Photo: DPA

The average wealth of German households is lower than both French and Italian ones, a report released on Wednesday by bank Credit Suisse said.

Despite the recession, average wealth per adult in Italy rose 5.6 percent to €178,615 between mid-2012 and mid-2013, according to the Global Wealth Report 2013, placing the country 13th in the world.

Wealth per adult was €154,900 in mid-2013 for the Eurozone, but there were significant differences between countries.

Credit Suisse estimated that household wealth in Austria, Germany, Ireland and the Netherlands was similar to the Eurozone level, but wealth is about 20 percent higher in Italy and Belgium. It is about 50 percent higher in France and Luxembourg.

Switzerland, which in 2011 became the first country where average wealth exceeded €370,000, topped the list.

However, Germany ranked highly for its number of millionaires coming in fourth place behind the USA, France and the UK. The number of millionaires in Germany is expected to grow by 46 percent by 2018. Meanwhile, total wealth grew by 7.7 percent in Europe, the report found.

At the global level, wealth per household increased by 4.9 percent to €38,188 per adult between mid-2012 and mid-2013. It also forecasts average household wealth will climb 39 percent over the next five years, with most of the wealthiest households being in emerging markets.

”Our research shows that global wealth has doubled since 2000, quite compelling given some of the economic challenges of the last decade,” said Michael O’Sullivan of Credit Suisse Research Institute.

“We expect this trend to continue in the foreseeable future, driven largely by Emerging Markets’ strong economic growth and rising population levels.”

READ MORE: French claim low German wages are unfair on them

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Card over cash? Why Germany is seeing a new payment preference

Germany has long been a very cash-based country, occasionally to the dismay of frustrated tourists at the Döner shop.

A few German phrases express the people’s love of physical money. There’s ‘only cash is true’ – Nur Bares ist Wahres. Or Bargeld lacht, literally meaning cash laughs, but used to imply that cash is what’s wanted, similar to ‘cash is king’ in English.

But the classic German preference for cash appears to be evolving, as the use of girocards is growing, even for small transactions.

How are girocards being used?

Girocard, an ATM and debit card service offered by German Banks, was designed to allow customers to use virtually all German ATMs and, increasingly, to make purchases at businesses.

READ ALSO: Ask an expert – Why is cash still so popular in Germany, and is it changing?

Last year, consumers in Germany used their Girocard more often than ever before for cashless payments. A total of €7.48 billion payment transactions with the plastic card were counted – 11.5 percent more than in the previous record year 2022, according to figures published by the Frankfurt-based institution Euro Card Systems.

Whether at the bakery, petrol station or supermarket, customers are increasingly pulling out their cards at the checkout, even for smaller amounts. As a result, the average amount paid with the Girocard fell from €42.34 to €40.69 within a year.

The rise of card payments in Germany

Contactless payment, which is possible with girocards and credit cards that have an NFC chip, got a boost during the Covid pandemic, as retailers promoted it for hygiene reasons.

But the use of card payments has continued to grow in Germany since then, boosted partly by the increasing use of girocards.

Promoting the use of girocards, some German banks have expanded their cards’ functions: Sparkassen, Volksbanken, or Raiffeisenbanken offer girocards for the digital wallet, for example.

Banks want to continue upgrading the payment card with further applications. For example, a project is being tested which would add an age verification function to girocards that would be useful when a customer is buying cigarettes.

On the retail side, it’s clear why the Girocard is preferred to other debit options.

“We see that debit cards from international providers cost up to four times more,” Ulrich Binnebößel, Head of the Payment Systems & Logistics Department at the German Retail Association (HDE) told DPA.

What’s the difference between the Girocard and other debit?

The Girocard is a strictly German phenomenon. It can be seen as the latest iteration of the EC card, which was created to consolidate payment systems following the unification of former East and West Germany.

In 1991 different debit card systems, including Eurocheque guarantee cards from former West Germany and Geldkarte ATMs from former East Germany, were unified into Eurocheque cards.

Then in 2001, the Eurocheque system was disbanded, but German banks continued to use the EC logo for “electronic cash’” cards, or EC cards. In 2007, the German Banking Industry Committee introduced Girocard as a common name for electronic cash and the German ATM network.

Girocards are only issued and accepted in Germany, so if you want to get one of your own, you’ll have to join a German bank, and shell out those notorious German banking fees.

READ ALSO: Why it’s almost impossible to find a free bank account in Germany

Alternatively, you can get by with internationally accepted debit cards provided by a bank in your home country, or otherwise by joining an app-based European banking service like N26.

But be warned, without the Girocard in hand, at some smaller retailers you may be told, “Leider nur Bargeld oder EC-Karte.”

With reporting by DPA

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