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MONEY

EXPLAINED: Where public transport costs are going up in Germany

Amid rising fuel and electricity costs and a decline in Covid passenger numbers, many German transport companies are hiking their fares. But others say they want to incentivise train and bus use with steady prices. Here's what you need to know.

S-Bahn logo on a bridge in Munich
The Deutsche Bahn S-Bahn logo is displayed on the Hackerbrücke in Munich. Photo: picture alliance/dpa | Sven Hoppe

The past few months have been full of bad news for consumers in Germany: the price of household goods is rising at record levels, fuel and energy costs are soaring, and even the price of one of the country’s most beloved commodities – beer – could be set to rise in the near future

According to a recent analysis by DPA, it seems public transport users are set to be the latest group to fall victim to a new wave of price hikes.

In winter, costs will rise not only for long-distance transport on Deutsche Bahn trains, but also for local transport in many regions. This means that daily journeys could become significantly more expensive: in some areas, the average ticket price will rise by up to 5.5 percent. 

In some regions, however, transport operators are keen to keep things affordable. With the pandemic seeing vast swathes of passengers switch to car, the goal is to encourage people back to public transport with predictable, good value tickets.

Here’s where transport costs are going up – and where they’re remaining steady.

Where are prices going up next year?

Hamburg

According to DPA, the Hamburg transport association is the latest of the transport operators to reveal plans for a price increase in 2022. Residents of the Hanseatic city will be expected to pay an average of 1.3 percent more from the turn of the year.

“Nobody is happy about that,” the association admits. But they say the price rises are justifiable in light of the current rate of inflation in the country. “Everything is getting more expensive,” they told DPA. 

According to the transport association, however, only a part of company’s higher costs will be passed on to the passengers. The vast majority of the expenses will be borne by the taxpayer.

Bavaria and Baden-Württemberg 

According to the Greater Nuremberg Transport Association, which serves large parts of Franconia in Bavaria, outlays for its 135 member companies are getting steeper by the day. Not only must they pay higher prices for fuel and electricity, but they’re also attempting to finance new transport networks and digital offers at a time when revenues from passengers are particularly low. 

For Franconians, that means bus and train travel will become considerably more expensive from next year. In the VGN, fares will rise for the first time in three years, with prices surging by an average of 5.5 percent.

For residents of Nuremburg itself, however, millions of euros of transport subsidies from the treasury have helped ensure that prices remain stable.

The entrance to the Marienplatz Underground Station
The entrance to the Marienplatz Underground Station in Munich. Munich and the surrounding area will see ticket prices go up by 3.7 percent from mid-December. Photo: picture alliance/dpa | Peter Kneffel

Residents of Upper Bavaria won’t be spared the upcoming price hikes, however. In Munich and the surrounding area, prices are set to rise by 3.7 percent from mid-December. “The Covid pandemic brought with it huge income losses for us,” explained the local transport association. 

In Stuttgart and the surrounding area, tickets for public transport will become 2.5 percent more expensive in the new year.

The Rhineland

In the Rhine-Ruhr transport association, which serves the most populous region in Germany, fares will increase at a somewhat slower rate of 1.7 percent next year.

Meanwhile, in the neighbouring Rhine-Sieg and Rhine-Main transport associations, which cover large parts of Hesse, fares will rise by 1.5 per cent. For journeys outside of the transport associations, Deutsche Bahn has announced fare increases of 1.7 percent.

READ ALSO: EXPLAINED: How to find cheap train tickets in Germany

Where are transport costs remaining the same? 

In amongst the wave of price rises, many of the northern German states (with the exception of Hamburg, of course) are emerging as havens for public transport users. 

In Bremen, the surrounding area of Lower Saxony, and in Berlin and Brandenburg, there will be no price hikes for the coming year. For Bremen residents, this will be the second year in a row that prices have remained stable. 

These transport operators have all taken a different view on how best to recoup losses in the aftermath of the Covid pandemic. With passenger numbers on regional services still just below pre-pandemic levels, they want to encourage customers back on buses and trains with stable, affordable ticket prices.

READ ALSO: German train travel almost back to ‘pre-pandemic levels’

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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.

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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