NEW DATA: Behind Germany’s Obsession With Cash

Geld stinkt nicht

Germany might be an economic powerhouse, its citizens are rather old fashioned but when it comes to payment preferences — and happily so.

According to research inside the new PYMNTS Global Cash Index™ Germany Analysis, the country has a cash share of 20 percent as of 2016. That’s the sixth-highest cash share of countries in Western Europe, higher than that of neighboring nations like Belgium (15.4 percent), France (7 percent) and the Netherlands (7.1 percent).

So, why the preference for physical currency? Research suggests history might hold the answers.

In the 20th century, Germany faced repeated economic meltdown thanks to hyperinflation, reparations from World War I and the economic and military devastation following its defeat in 1945. Those incidents gave German consumers both in that century and this one a frugal and debt-averse nature, helping to explain its low usage of alternate payment forms like credit cards. 

But that historical tide may be slowly beginning to turn with younger consumers opening up to alternative payment methods. Cash usage as a percentage of the country’s GDP declined by an average of 2.1 percent between 2007 and 2016. What’s more, PYMNTS research expects the total use of cash to continue to drop through 2022 at a rate of 1.4 percent per year.

Other key takeaways from the new Global Cash Index™ Germany Analysis:

  • Germany’s GDP grew by an average of 1 percent per year between 2007 and 2016, bringing its total GDP to €3.1 trillion and making it the number one economy in Europe.
  • All told, German consumers spent roughly €649.6 billion in cash last year, amounting to 20.7 percent of the GDP.
  • Over the counter (OTC) cash withdrawals accounted for 8.8 percent of the GDP in 2016, down from 15.6 percent in 2007. ATM withdrawals remained mostly constant, however. As of 2016, they represented 11.9 percent of the GDP, matching 2007 rates.

Why Germans continue to pick cash over cards 

But history isn’t the only reason for cash’s continued dominance in Germany.

According to Heike Mai, a German economist and banking and financial markets analyst for Deutsche Bank AG, a range of factors including merchant acceptance, convenience and a historical skepticism toward new financial technology, among others — could be leading the German cash craze.

In a recent interview with PYMNTS, Mai said that figuring out exactly what is fueling cash’s reign — and how it might evolve — is easier said than done.

“Along with [Austrians], who are also heavy cash users, we are probably the country that loves cash the most,” she said, “and we are happy cash users. But, why we love cash is the thousand-dollar question right now, and I’m not sure anyone can answer it for sure.” 

About the Index

The Global Cash Index™Cardtronics collaboration, focuses on the use of cash as a payment method that plays an equal 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.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.