“A year ago, I couldn’t pay with a card at a local bakery,” said Bundesbank board member Burkhard Balz. “Today, a year later, you’re already watching to see if you still want to pay in cash.” Many Germans have probably had similar experiences in the last few months.
And Balz sums up developments in recent months that have been significantly driven by the pandemic: Germany’s accelerated farewell to cash. And a comprehensive survey of the Bundesbank, conducted between August and October, now supports the numbers.
These tests are performed every three years. This time, 5022 representatively selected people were interviewed, 4227 of whom kept a payment diary for at least one day, ie they recorded all the payments they made, indicating the place and method of payment. And the results are clear.
“We are seeing a significant increase in card payments,” says Balz. Specifically, the Germans still use cash in 60 percent of all transactions. However, three years ago, three quarters of all payments were made in cash. And the change is even more dramatic when you link it to the value of payments. Less than a third of sales were now realized in cash, three years ago it was almost half.
Payment by card has increased significantly. They were corrosive or Credit Cards used only in 20.5 percent of transactions, now in 29 percent. Transfers and collections have also increased, but this is mainly due to increased turnover on the Internet. At the box office, where this method of payment is not used, more than half of sales, exactly 55 percent, are now made by card.
Crucially, according to Balz, cards are now increasingly used for small amounts. It is true that amounts of up to five euros are still paid in cash in 89 percent of cases. Between five and 20 euros, it is also 70 percent.
The monetary part will again rise above 500 euros
However, the situation turns from the amount of 20 euros. Between € 20 and € 50, 45 percent of transactions are made with Girocard and another eight percent with credit cards. Only 43 percent of those who pay, ie a minority, use cash here.
Three years ago, the cards were only in advance for amounts between 50 and 100 euros. Now there is only a quarter of the cash payment. However, for amounts above EUR 500, the share is again surprisingly higher at 36 percent.
“Corona has accelerated the transition to cashless payments,” concludes Balz. And this development will not return after the end of the pandemic. “It shows post-coronal normality.”
It is important for it that the Bundesbank continues to support all payment methods, especially cash payments. At the same time, this means that it does not favor any payment method and does not hinder the development towards card payments.
A technical novelty, thanks to which card payment is becoming more and more attractive for many, is the possibility of contactless payment, in which the card is only briefly attached to the reader. Three-quarters of those who have a giro or debit card with a contactless feature also use it. For credit card holders, this is about two-thirds.
Smartphone payment is on the rise
A fifth of those who use this feature did so for the first time during a pandemic. Most of them did so because they were asked to do so by the checkout counters, or because they thought it was more hygienic.
Smartphone payments are also growing. So far, only about three percent of cashier transactions are made through services such as ApplePay, GooglePay or the banking applications of savings banks and Volksbanks. Overall, only about 13 percent of those who own a smartphone have used it so far. However, there are big differences between sexes and age groups.
Although only nine percent of women use it, twice as many men. For younger people under 34, it is even 22 to 23 percent. In the above age groups, the older the cohorts, the fewer they are. But even people over the age of 65 pay at least five percent using a smartphone.
Of those who have not yet done so, 70 percent said they did not see it. However, experience shows that such a need can be easily awakened. This has already been evident in contactless payments. Every eighth switched to it because friends or acquaintances showed it or pointed it out. And once enough people pull out their smartphones in the bakery in the morning, that could soon become part of the new normal.