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Brexit set to bring 100,000 jobs to Frankfurt: study

The expected mass exodus of UK-based bankers because of Brexit could bring up to 100,000 new jobs to Germany's Frankfurt region over the next four years, according to a study published on Friday.

Published: 25 August 2017 09:39 CEST
Brexit set to bring 100,000 jobs to Frankfurt: study
The Frankfurt skyline including several of its financial buildings. Photo: DPA.

The report, commissioned by the Frankfurt Main Finance lobby group, comes as Germany's financial hub has taken an early lead in the battle for the spoils of Brexit.

The study by the WHU-Otto Beisheim School of Management said 10,000 new banking jobs are expected to flood into Frankfurt as a result of Britain's decision to leave the European Union, and this would have a multiplying effect on other sectors.

“New bank employees will increase demand for housing, infrastructure and transportation, education, healthcare, consumer goods, food, and so on,” the researchers said.

Working from the expectation that the initial “Brexit shock” will bring 10,000 banking jobs, and assuming economic growth rates remain stable, the study calculated that at least another 21,300 non-banking jobs would be created in the city of Frankfurt alone.

Under its most “optimistic scenario”, Frankfurt and the surrounding Rhine-Main region, which includes towns as far as 80 kilometres further south, could see a boom of nearly 88,000 additional jobs, the study found.

“As the Brexit effect is permanent, the non-financial employment effect will also be long-term,” the authors added.

READ ALSO: Relentless political lobbying gives Frankfurt edge in Brexit banking race

Many UK-based financial firms are looking to move certain operations to eurozone cities as they risk losing their “passporting rights” to do business with clients in the EU once Britain definitively quits the bloc in March 2019.

Frankfurt, already home to the European Central Bank, has emerged as the frontrunner in the race to attract bankers fleeing London.

Major US and Asian banks, including Goldman Sachs and Japan's Nomura, Daiwa and Sumitomo, have already opted for the city on the Main river over rivals like Amsterdam, Dublin and Paris.

Frankfurt is also considered a favourite to host the European Banking Authority which will be leaving its current home in London.

Hubertus Vaeth, director of the Frankfurt Main Finance group promoting the city to foreign banks, said the expected jobs bonanza for Frankfurt and the surrounding area was “a real win for everyone involved”.

“What's important now is to understand and shape this growth. This will be a challenge,” he said.

SEE ALSO: Frankfurt takes early lead in race to woo over London's banks

BANKING

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.

Published: 13 February 2024 12:31 CET
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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