Germans want to keep their hands on cash

Confirming conservative stereotypes, Germans have come out strongly in favour of sticking to hard cash in conducting transactions, a survey published on Thursday showed.

Germans want to keep their hands on cash
Germans still trust cash over other forms of payment. Photo: DPA

Paying for your bus ticket with a contactless card, putting down plastic in a restaurant or shop – these may be everyday aspects of life in the Anglophone world. But not so in Germany, where remembering to go to the cash point is something many expats have to get used to.

And according to a study released by YouGov on Thursday, this is just how Germans like it. Nearly three quarters (74 percent) of respondents said that they would oppose a law allowing shops and businesses to refuse cash payments.

Just this is currently being planned in Denmark, where from next year onward businesses will be allowed to refuse notes and coins.

While 21 percent of Germans would be open to a change in the law, it seems most still see cash as safer and more reliable than card and other modern forms of payment.

The survey shows that three quarters of Germans believe cash is safer than card payments. They also believe that paying in cash helps one keep a better overview over one’s finances.

That means cash is still the most popular payment option in the country.

Research by the German Bundesbank (central bank) shows that four out of every five transactions are still conducted with cash and that over half (53 percent) of the total amount of money exchanged changes hands, quite literally, in cash.

In the United Kingdom, by comparison, the number of cash transactions was outstripped by the number made with cards or other non-cash forms of payment earlier in 2015.

Several leading economist have outed themselves recently as supporters of the retirement of cash altogether.

Economist Peter Bofinger has argued that getting rid of cash would act as a barrier to cash-in-hand work and drug dealing. Money laundering and tax avoidance would also become much harder, he has claimed.

But the benefits that come with tracking down digital money more easily could be a double.edged sword.

Paying by card means that purchasing anything from a beer in the local pub to a loaf bread in the bakery is recorded. While this can be advantageous for tracking down criminals, it also poses an increased threat to consumer privacy.

On this point German public opinion is split. While 23 percent consider it positive that cash cannot be traced so easily, 22 percent see it as a bad thing. Almost half meanwhile are undecided.

But behaviour is slowly changing. According to the EHI Research Institute over the last 20 years retail transactions by card have increased eight-fold.

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

Cash has long been king in Germany, with many smaller retailers refusing to join the rest of the world in adopting contactless payment systems. But card-based payments are on the rise, as recent stats about Girocard use reveal.

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