Cash Still King In Germany, While Its Neighbours Go Cashless

July 8, 2022
New data from the Bundesbank shows that cash remains dominant in the EU’s largest economy, while research in neighbouring Belgium shows clear digital preferences.

New data from the Bundesbank shows that cash remains dominant in the EU’s largest economy, while research in neighbouring Belgium shows clear digital preferences.

“Neither digitisation nor the pandemic were able to displace cash. When it comes to making payments, cash is still by far the most popular in Germany,” explained Johannes Beermann, the Deutsche Bundesbank board member responsible for cash.

Beermann was addressing the German central bank’s new report, its sixth study, looking into payments behaviour in the country in 2021.

Germany, like its southern neighbours Switzerland and Austria, is widely known to be a cash-dominated payments market, contrasting dramatically to the largely cashless societies bordering it to the North and West, including France, Netherlands, Belgium and Denmark.

Even though cash was used less frequently during the course of the COVID-19 pandemic, many respondents told the Bundesbank that they still considered it reliable.

Respondents said that they valued the protection of privacy, as well as having a good overview of their spending.

Cash represents around 30 percent of retail sales in Germany, according to the Bundesbank, while on average, consumers who were surveyed said that they had around €100 in their wallet, which is almost the same as four years ago (€103).

Also noteworthy was the vast majority of respondents (69 percent) stating that they would continue to pay with cash in the future.

Meanwhile, four out of ten respondents expressed a preference for card payments or other cashless means of payment, which was reflected in their actual use, the Bundesbank said.

According to the central bank, card payments represented 29 percent of all POS transactions.

Debit cards, in particular, and primarily the domestic girocard scheme, was the second most frequently used means of payment after cash. According to the study, this payment method accounted for 23 percent of all transactions.

Mobile payments, as well as payments using wearables such as smartwatches or fitness bracelets, are becoming increasingly established in Germany too.

Some 17 percent of the smartphone owners surveyed said they had used their device to pay at the checkout, while 27 percent of smartwatch or a fitness bracelet with a payment function said they had used it.

Smartphones and wearables are therefore becoming increasingly popular as an alternative way to pay, the Bundesbank noted. The study also shows that 34 percent of those surveyed use apps to easily send and receive money.

“I expect that more and more people in Germany will exchange their physical wallet for an electronic wallet in the future”, said Burkhard Balz, the member of the Deutsche Bundesbank management responsible for payments and settlement systems.

Belgium and France

Other jurisdictions in the EU have also released revealing payment surveys this month.

Coinciding with new a legislative change that will mean all merchants in Belgium need to provide a digital payments option, the banking lobby group Febelfin has released a report looking at payment preferences.

According to Febelfin, this new law “echoes the change in consumer behaviour and offers merchants the opportunity to better meet the expectations of their customers”.

Of those surveyed, one in ten Belgians said they had left a business premises because it was not possible to pay digitally.

The study revealed that 84 percent of Belgians now prefer digital payments, with contactless payments by card now the country’s preferred choice at the point of sale.

In 2022 to date, 74 percent of Belgians have paid at least once with a contactless card in a physical store, compared with 47 percent prior to COVID-19.

Belgians are also warming to QR code payments, with the report suggesting that 42 percent of consumers are comfortable with the payment method in its 2022 survey, compared with 34 percent in 2021.

Digital payments are also making progress in France, as indicated by a new report from the National Cashless Payments Committee (CNPS), which is overseen by the Banque de France.

Adopted in February 2019, the CNPS is overseeing a national strategy to encourage digital payments, and has revealed that more than 90 percent of French bank accounts are instant transfer enabled, while more than half of all card payments are contactless.

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