Pandemic boosts card payments in cash-loving Germany
“King Cash” is being slowly dethroned across the European Union, according to a new survey from ING bank.
The study found that even Germany’s famous love affair with cash has waned during the COVID-19 pandemic, by an amount that would have normally taken a generation.
Cash usage has declined in Europe as a whole, with people reaching for their debit and credit cards or paying with mobile phones as more hygienic options during the pandemic.
The ING survey of consumer attitudes towards cash in 13 European countries, carried out in May this year, found that the number of people who said they still prefer to use cash had dropped by 7 percentage points to 14%, and in Germany by 8 points to 19%.
In Germany, 44% of people said they had reduced their cash usage because of COVID-19 compared with a European average of 57%.
Germany’s fondness for cash is largely rooted in its traumatic past century. For those who lived in the former Communist East Germany (German Democratic Republic), from 1949-1990, the surveillance state also created an attachment to the anonymity that cash affords.
Just over half of Germans surveyed said that COVID-19 had made them more hesitant to use cash than before, compared with an average of nearly 70% in the EU average.
In Germany, more people still reach for cash to pay for things like lunch or transport tickets than in neighbouring countries, and cash-versus-cards remains a generational split.
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Those in the 25-to-34 year age group use cards more frequently than older people — only 23% of this age group pay their regular grocery shopping in cash, compared with 40% of older consumers.
“Cash is king” continues to apply to small everyday expenses in Germany for 60% of people. For occasional, medium-sized expenses, contactless payment is on the rise, and for rare large expenses, almost half of consumers still prefer to pay with the classic card-with-pin number.
ING notes that it remains to be seen whether this virus-induced growth in card usage in Germany will be a lasting change or whether consumers will return to their cash-loving ways after the pandemic.
Alexander von Schirmeister, executive vice-president for Europe at electronic payments company SumUp, told Yahoo Finance UK earlier this year that the WHO’s recommendation to transact with cards rather than cash was “a very sudden wake-up call in a market such as Germany, for both consumers and merchants.”
SumUp saw a sudden surge in online payment transactions using its card readers once the lockdown happened in March.
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