Bank vaults are typically thought of as pretty safe places to store money, but, according to new reports, consumers in Germany have been looking to keep their friends close and their cash closer.
According to the Wall Street Journal’s Ulrike Dauer, Germans who previously deposited funds into savings accounts despite quickly falling interest rates have been eschewing banks to keep their savings at home, in cash. Frugal consumers have been pushed away from traditional financial institutions by interest rates that have dropped into negative territory, and they are increasingly keeping large sums such as pension plan payouts in cash inside their homes.
This recent run on German safes shows that, while new payment types are becoming more popular, cash is still king for many consumers, as is documented in the PYMNTS.com Global Cash Index™. The Index is a quarterly report that focuses on the use of cash for making payments and as a payment method that equally plays a role with cards, checks, direct debit, and other methods of settling up between consumers and businesses.
According to Dauer, this increase in cash has had an interesting effect on one particular sector of the German economy: safe makers. According to sources in the report safe manufacturers in the European Union nation “are operating near their limits.”
German consumers are not just hoarding the cash away in safes, however. Research indicates that the vast majority of German retail transactions (roughly 80 percent) are conducted in cash, nearly twice the rate of cash usage in the United States. Germans also deposit more than twice as much cash from the average ATM visit, withdrawing $256 on average, when compared to American consumers, who withdraw just $103.
Cash remains so popular in Germany due to privacy and security concerns. Consumers said that they liked the fact that cash gave them some anonymity when making transactions, and felt it was often more secure than other payment methods.
To download the PYMNTS.com Global Cash Index™, click below…
About the Index
The PYMNTS.com Global Cash Index™, a Cardtronics collaboration, focuses on the use of cash for making payments and as a payment method that equally plays a role with cards, checks, direct debit and other methods of settling up between consumers and businesses. Unlike most reported estimates of cash, our proprietary data analysis focuses on the use of cash for making payments rather than hoarding.