Germans hang onto cash as rest of world goes electronic

Germans hang onto cash as rest of world goes electronic
Photo: DPA

Germany's attachment to cash is under attack, with European Union encouraging people to pay with cards and even mobile phones by making it safer and easier to do so.


But the German love of using notes and coins in situations where cards are used in many other countries will make it an uphill battle to promote electronic payment here.

The Bundesbank says an average German carries €118 around with them in cash, of which €6.70 is in coins – weighing more than 100 grams. And in 2008, around 82 percent of all transactions were carried out in cash – particularly those for smaller amounts.

Those in favour of electronic payment say it is safer and cheaper than paying in cash, according to Die Welt newspaper on Sunday.

Cash is even more expensive, says the European Commission, and is a useful tool for criminals. In Sweden authorities are expecting cash to be practically phased out over the next few years, and the number of robberies of shops to plummet as a result.

This is not to be expected in Germany, said Malte Krüger of Paysys Consultancy, which advises cash and credit card companies.

“A cashless future is not realistic in the foreseeable future,” he said.

“Many act as if paying by card is much cheaper than cash, but that is not true.” He said the European Commission estimates that cash payments cost between 30 and 55 cents each time, in infrastructure, but Krüger said the figure was more like 14 cents.

As for criminality, Krüger said, “One can say that it is a problem with cash, but one can also say that it’s a security problem in the country.” He said if all payments were to be switched to cards, criminality would simply shift to focus on that.

Die Welt also argues that it is a cultural matter – that Germans simply do not like the idea of their every payment being recorded and thus traceable. Swedes are seemingly far more relaxed about such matters – tax statements are even available online there.

Cash, “offers a space which is not under control – no-one asks where it has come from,” said Ingo Härlen, an economic psychologist.

It is also interesting to see people’s personal emotional relationship to cash when it comes to spending – or overspending. Härlen said the physical act of handing over money can be useful in keeping control of how much a person spends.

Globally, electronic payment methods are on the march, with consultants Arthur D. Little estimating that in 2012, around $250 billion will be paid with mobile phones over text messages.


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