A dinner for three for 106 euros, a jersey for 25 or a beer for 3.5. “You cannot pay by card, we are sorry.” This situation has become normal for residents in Germany. Surprisingly for many, Europe’s first economic power remains stagnant in a payment system of the past, thus becoming one of the countries in the world where cash is used most and turning its back on digital systems such as credit cards and debit
Germany is far from leading the “cashless” payment method. In other countries where digitalization of payment systems are much more advanced, such as Sweden, up to 80% of retail sales are acquired through cards, but in Germany these are reduced to only 51%. If that purchase is limited to physical spaces – that is without taking into account the increasingly popular online stores – 78% of Germans still pay in cash.
According to the Bundesbank studies, each German has an average of 103 euros in the portfolio, 11 euros less than in 2008. In Italy the average is 69 euros, in Spain 50 and in France 32.
Can’t that be a logistical problem? Certainly, having to leave home loaded with money in your pocket can be a nuisance for those who are not accustomed, but in Germany tradition continues to bet on bills and coins. To make it more bearable, the number of ATMs in the country has grown to 58,000 in the last two years, which is a record high. Money withdrawing machines are increasingly present in the country.
Tradition without explanation
“People love their cash, it is a cultural tradition in Germany,” said Michael Kemmer, director of the Association of German Banks. But why do Germans like to pay tocatecate so much, without an intermediary card? Although there is no concrete answer that explains that mentality, there are different versions and conjectures.
For some, the ability to have money physically, in the hand rather than in that abstract and ethereal space that is the banking system means freedom to control. In that sense, studies suggest that these consumers ensure that being able to control their money and spending is still a much loved value. So dear that all political parties defend continuing to pay in cash.
Other voices suggest that some Germans prefer cash for a matter of privacy and distrust of power. Not without reason, the country has been historically marked by the persecution of the Gestapo, the Nazi secret police, and by the espionage systems of the two Germans divided into blocks, especially the Stasi. Faced with this distrust, paying with bills and coins avoids the control and tracking that bank entities obtain through an electronic card and whose data is likely to end up in the hands of the government.
However, the most feasible version seems to be the trauma and impact of a tumultuous monetary history. Thus, there are those who point to a past marked by periods of severe inflation, especially that which occurred in 1923 during the Weimar Republic and the one that arose after the Nazi collapse in 1945, as an explanation for the use of cash. Under Allied rule, the rationing of prices and the exchange of currency to the framework seriously hurt the pockets of the Germans.
But can the crazy price increase that occurred 95 years ago continue to mark day by day? Other countries with strong banking crises behind them such as Greece and Ireland also opt for ‘cash’. In addition, in the German case that willingness to keep money safe and under control also responds to doubts about the future and a known aversion to debt that translates into other vital areas such as a real estate system marked by the rental tradition to the detriment of the purchase and mortgage.
Despite maintaining that curious tradition of payment, the system seems to lean very slowly towards a “cashless” which is already the norm in the societies of Nordic Europe. Thus, the young German population begins to prefer payment with cards instead of carrying bills and coins. In addition to a digitalization in which Germany is also behind, this change may be due to the increasing restrictions on the use of cash to avoid the underground economy as well as money laundering. The trend seems to be moving, but, yes, if you travel to Berlin, go first and get money.
Source: El Periodico