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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Where in Germany do people have the highest disposable income?

An economic study has shown huge regional differences in income throughout Germany. So which parts of the country have the most to spend each month, and which are feeling the squeeze?

Where in Germany do people have the highest disposable income?

A study by the Economic and Social Sciences Institute (WSI) of the Hans-Böckler foundation reveals stark regional differences in disposable income in Germany. In some cases, households had as much as double the spending money of those in other parts of the country. 

Here’s where people have the most – and least – disposable income each month.

What is disposable income?

The WSI calculated disposable income as the sum of income from wealth and employment, minus social contributions, income taxes, property taxes and other direct benefits or taxes.

What’s left is the income which private households can either spend on consumer goods or save.

The study, which was based on the most recent available national accounts data for 2019, looked at the disposable income of all of the 401 counties, districts and cities across Germany.

Which regions have the highest and lowest disposable incomes?

The study found that the regions with the highest disposable incomes were in the southern states.

Heilbronn in Baden-Württemberg had the highest disposable income of all 401 German counties and independent cities – with an average per capita disposable income of €42,275. The district of Starnberg in Bayern followed in second place with €38,509.

READ ALSO: REVEALED: How much do employees really earn across Germany’s states?

By comparison, per capita incomes in the cities of Gelsenkirchen and Duisburg in North Rhine-Westphalia were less than half as high, at €17,015 and €17,741 respectively. These regions had the lowest disposable income in the country. 

The study also found that, more than thirty years since German reunification, the eastern regions continue to lag behind those in the west in terms of wages.

According to the WSI, the Potsdam-Mittelmark district is the only district in the former east where the disposable per capita income of €24,127 exceeds the national average of €23,706.

Do regional price differences balance things out?

The study also showed that regionally different price levels contribute to a certain levelling out of disposable incomes, as regions with high incomes also tend to have higher rents and other living costs.

“People then have more money in their wallets, but they cannot afford more to the same extent,” WSI scientist Toralf Pusch explained.

READ ALSO: EXPLAINED: When will Germany raise the minimum wage?

Therefore, incomes in the eastern states, adjusted for purchasing power, are generally somewhat higher than the per capita amounts would suggest.

That could explain why, even after price adjustment, the cities of Gelsenkirchen and Duisburg in western Germany continue to be at the very bottom of the list.

Saxon-Anhalt’s Halle an der Saale, on the other hand, which has an average disposable income of only €18,527, benefits from the lower prices in the east.