Commentary • 03.04.2018

Goodbye cash – or maybe not? Germany’s relationship with cash and credit cards

Electronic payments are on the rise – cash payments continue to decline. Is that a sign that Germany will soon abolish cash? That‘s quite unlikely.

Not again! I just want to make I quick bakery run and grab a roll. Do I have enough change in my wallet? No. What about my purse? Yes, I found two Euros! That should be enough. Otherwise, I would have had to get some cash first. When it comes to smaller amounts – especially at the bakery – it would be great if I didn’t have to pay cash. How many times have I been asked there whether I have the exact change? Or whether I have ten cents to make change? That’s why some bakeries in Germany now also offer cashless payment options. But my bakery does not.

Unlike the fruit shop in my village. As of late, it finally offers electronic payment options. I wanted them to do this for some time. After all, how many times did I have to drive past the farm shop because I had no cash on me? It makes me wonder how much money this retailer has lost over the years because of it. But there is a catch: the minimum transaction amount to pay by card is 15 Euros. Now I no longer worry whether I am able to pay but instead I worry whether I bought enough to reach the minimum amount to use my card. That’s still not practical in my eyes – but it’s something that still happens a lot.

I admit, I love to pay with my credit card. The tiny card doesn’t take up much space and the account statement shows exactly where, when and what I spent my money on. Even though studies show that paying with cash makes consumers more frugal and prevents them from making extravagant purchases, do you really keep better track of your money this way? I would have to keep all my sales receipts, so I would know at the end of the month how much money I spent and for what.

Would I really be willing to completely live without cash?

The pocket money I give my children, the change I give a homeless person on the street, the tip for the pizza delivery person (I paid the pizzas in advance via PayPal). Would my 90-year-old neighbor trust in paying for her bread by credit card at the bakery? After all, she is used to paying cash. And in fact, Germans are extremely fond of paying cash. They associate cash with anonymity, independence from banking institutions, self-determination, and tradition.

The current study of the Deutsche Bundesbank (Central Bank of the Federal Republic of Germany) has once again shown that cash remains Germany’s most popular means of payment. That’s also why financial experts warn against forcing Germans to say goodbye to cash without asking citizens to be a part of this decision-making process. I suppose I wouldn’t be very happy if – as was the case with India – the government simply decided my cash to be worthless and forced me to only make electronic payments.

With that in mind, I guess I can somewhat understand the initiatives to keep cash as a means of payment. By the way, these initiatives are not just taking place in Germany but also in Sweden, even though – or maybe because of it - paying with a credit card is widely accepted and popular there.

Pocket money, public restrooms or coffee-to-go – everything is paid by credit card or by bank app via smartphone. Admittedly, the Swedes have no choice but to gradually do without their cash. Banks simply refuse to accept or spend cash. That’s why everyone pays with a credit card or the mobile – especially in urban areas. Having said that, there are a few drawbacks to all this. What about people who don’t own a smartphone or live in an area with no or slow internet connection? Retailers in these areas are clearly getting the short end of the stick. Many people are already hoarding their cash at home – simply because they are unable to spend it. Surely that can’t be the point of all this.

Thoughts for Discussion:

The total costs of cash handling – including security, transportation etc. – are higher than card payment costs (European Payments Council)

Cash payments don’t need electricity

Cash doesn’t leave a data trail – unlike cashless/mobile payments, which will make more “personalized offers” possible. Though this might lead to price discrimination …

Sweden has fewer bank robberies but instead, an increase in card fraud

Münzgeldspende
In Sweden, donations are even made on the street via smartphone. Every homeless person just has to rap money for a mobile phone. Isn't that simple?
Source: PantherMedia.net/belchonock

Let’s hold hands

The pros and cons of cash and cashless payment methods venture far outside the scope of my commentary. There are too many cooks in the kitchen – the financial world, the consumer, the retail industry, the government.

One thing is clear: Experts agree that we are still a long way away from becoming a cashless society. That’s why the Central Bank (Deutsche Bundesbank) recommends the co-existence of different payment options. And why not? It’s a proven fact that technological options for electronic and mobile payments will continue to inspire more people to embrace cashless payment methods anyway. That’s also why the German Retail Federation HDE recently stated that for the time being, additional methods will continue to be seen as an option in German retail.

If only I could already use these alternatives everywhere. Anyway, I am off to get some dinner rolls … and I will pay with cash.

Author: Natascha Mörs, iXtenso - Magazine for Retailers

related articles:

popular articles:

Thumbnail-Photo: Consumer adoption of retailer mobile apps doubles...
06.09.2018   #digitization #app

Consumer adoption of retailer mobile apps doubles

67 percent of consumers use a retailer app on their phone

As mobile shopping continues to grow, consumers are downloading retailer’s mobile apps at double the rate of years past and conducting more in-app purchases, according to new findings from Synchrony. As the mobile channel becomes ...

Thumbnail-Photo: New cash management solutions for the convenience sector...
08.11.2018   #cash management #cash handling systeme

New cash management solutions for the convenience sector

APG Cash Drawer partners with MSP Systems

APG Cash Drawer, a fast-growing global manufacturer of cash management solutions, announced today its new partnership with MSP Systems, a leading EPOS technology provider for the convenience sector in the UK.  MSP is now offering the SMARTtill ...

Thumbnail-Photo: Standard cognition opens San Francisco’s first public cashierless store...
20.09.2018   #cashpoints, cash register, cash desk #self-checkout systems

Standard cognition opens San Francisco’s first public cashierless store

Consumers can shop and pay without scanning or stopping to check out

Standard Cognition, which is eliminating the hassle of retail checkout by removing it entirely, announced today that it has opened San Francisco’s first public cashierless store. Located at 1071 Market Street, the Standard Market ...

Thumbnail-Photo: Absen LED free-standing centrepiece
16.10.2018   #led technology #led lighting

Absen LED free-standing centrepiece

Korean shopping mall sets new retail standard

Situated in Northwest Seoul, Starfield Goyang is the third and latest Starfield mall to open on the outskirts of the South Korean capital, and Starfield’s new shining star. As the largest indoor shopping theme park in Korea’s ...

Thumbnail-Photo: Francisco Partners Completes Acquisition of Verifone...
27.08.2018   #payment systems #payment terminals

Francisco Partners Completes Acquisition of Verifone

Mike Pulli assumes role of CEO at Verifone

Verifone Systems, Inc. (“Verifone” or the “Company”), a global leader in payment and commerce solutions, today announced that it has been acquired by an investor group led by Francisco Partners, a leading technology focused ...

Thumbnail-Photo: Top-Toy strengthens stores with digital initiatives...
02.10.2018   #brick and mortar retail #digitization

Top-Toy strengthens stores with digital initiatives

Digital initiatives to boost the stores and ensure competitiveness

A highly competitive market with frequent campaigns such as Halloween, Black Friday, and Christmas puts great demands on retailers. This is also the case with Top-Toy, the leading Nordic toy group, which operates the Toys "r" ...

Thumbnail-Photo: Accurate and efficient: Artificial Intelligence for hiring and...
12.12.2018   #personnel management #artificial intelligence

Accurate and efficient: Artificial Intelligence for hiring and recruiting employees

"Other channels are no longer working": Interview with Melikshah Ünver from Taledo

Skilled labor shortage, high turnover rates and the challenges of digitization: recruiting and hiring top-quality employees is especially difficult in the retail sector, particularly when companies must shake off a dull and dusty image. This is when ...

Thumbnail-Photo: Superdata PromoServer – Customer loyalty as a factor of success...
26.10.2018   #multichannel commerce #customer relationship management

Superdata PromoServer – Customer loyalty as a factor of success

All instruments for customer loyalty and sales in a single solution

Customer loyalty programs play a central role in the retail industry in order to secure the customer’s favor with increasing competition. With the expansion of the sales and communications channels, the challenge of customer loyalty has ...

Thumbnail-Photo: Bygg-Ole in Sweden streamlines stores with electronic shelf labels...
12.10.2018   #electronic shelf labels (ESL) #electronic shelf labelling

Bygg-Ole in Sweden streamlines stores with electronic shelf labels

For more efficiency and free up time for more promotional activities

With the goal of saving time and money, the DIY retailer Bygg-Ole in Stockholm has implemented the solution Breece electronic shelf labels, which will help the DIY retailer to increase efficiency and free up time for more promotional ...

Thumbnail-Photo: Kaufland relies on state-of-the-art technology...
07.11.2018   #pos systems #retail

Kaufland relies on state-of-the-art technology

With an innovative POS system by AURES Technologies

Kaufland offers a completely new shopping experience with ist new store concept. The markets convince with their new, noble and highquality appearance. Modern colors combined with light wood and a new lighting concept create a pleasant atmosphere. ...

Supplier

Permaplay Media Solutions GmbH
Permaplay Media Solutions GmbH
Aschmattstr. 8
76532 Baden-Baden
Verifone (UK) Limited
7 Cowley Business Park, High Street
UB8 2AD Cowley, Uxbridge
CCV Deutschland GmbH
CCV Deutschland GmbH
Gewerbering 1
84072 Au i.d.Hallertau
APG Cash Drawer
APG Cash Drawer
4 The Drove
BN9 0LA Newhaven
AURES Technologies GmbH
AURES Technologies GmbH
Maisacherstr. 118
82256 Fürstenfeldbruck
Superdata EDV-Vertrieb GmbH
Superdata EDV-Vertrieb GmbH
Ruhrstr. 90
22761 Hamburg
Delfi Technologies GmbH
Delfi Technologies GmbH
Landgraben 75
24232 Schönkirchen