Germans still love paying with cash—but often they don’t have a choice

ATMs galore in cash-crazy Germany
ATMs galore in cash-crazy Germany
Image: REUTERS/Fabrizio Bensch
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The Germans’ preference for paying their way in cold, hard cash rather than using credit or debit cards has been well documented over the years.

According to an ECB survey (pdf) last week, cash is still king in Germany. It found that citizens of Europe’s biggest economy are still packing the most cash (link in German) in their wallets out of all the European Union countries: an average of €103 ($121) each. At the other end of the scale, the Portuguese and French are out-and-about with just €29 and €32 in their pockets, respectively.

Germans’ close bond to cash historically stems from  the country’s traumatic past, the multiple collapses of its currency, and a general pessimism about the future. An aversion to debt is another reason: in 2014 two-thirds of Germans believed paying with cash allowed them better control over their finances. Also, cash is anonymous, while cards leave a data trail—in a country where many today lived under the eye of the East German Stasi, privacy is still very important.

But the fact that they are still carrying more than €100 on them at any given time (it was €123 in 2014), is also down to a comparatively high density of cash machines coupled with relatively few retailers who offer debit or credit-card payments.

The Cologne Institute of Economic Research (IW) found that in 2016, the ratio in Germany was one cash machine to 13 cash-free payment terminals in shops and stores. For comparison, it was one to 91 in Sweden and one to 311 in Luxembourg.

While every German used his card on average 49 times last year, the IW found that Danes and Swedes paid with plastic more than 300 times, and the Brits more than 200 times. Bulgarians, Romanians, Greeks and Italians, however, waxed the plastic even less often than Germans.

The growing popularity of online shopping is forcing more Germans to whip out their credit cards. But even online, Paypal dominates. Paypal is used for 41% of online purchases, followed by bank transfers at 23%, and credit cards just 18% of the time.