In Germany, Cold Hard Cash Still the Way to Pay

Amid the great digital shift, there are still pockets of commerce — and even entire countries — where cash is king.

As detailed by NPR, though at least some verticals, such as grocery stores, accept card transactions (and thus see at some volume of contactless payments), a significant number of smaller businesses rely on cash to keep revenues coming in.

Against that backdrop, the country’s central bank, the Bundesbank, has issued an additional 17 billion euros more in notes and coins — in other words, the hard stuff — than was issued in February.  That compares, noted the bank, with a normalized three to five billion euros in issued hard cash monthly.

All told, cash accounts for 75 percent of all retail transactions within Germany, even taking into account, as the German Association of Money and Bond Services estimated, that a third of all card payments have been done through contactless means in the wake of the coronavirus.

Wallets Full Of Euros 

To get a sense of where the cash goes — and how much individuals are holding — relayed the Bundesbank’s findings in English. As the survey found, the average German carries about 107 euros in their wallet, and has more than 1,360 euros in bank safe deposit boxes.

“Self-employed, older people and high-earners were the most likely to keep a lot of cash tucked away,” noted

For the purposes of the bank’s study, those who were defined as “storing” cash were people who had held on to cash for at least two weeks.

It may seem incongruous that a nation as economically (and technologically) developed as Germany, would bank so literally on cash. But as the Bundesbank found,  there are a number of reasons underpinning why individuals keep their purchasing power in pocket. As many as 58 percent of consumers cited low-interest rates as an impetus to keep bills and coins on hand. Roughly 55 percent said that cash, of course, is a widely accepted means of payment. Other respondents said there was a lack of trust in the technology infrastructure in place … and 12 percent said that “hiding assets from the state” as a reason to hold on to cash.

The stickiness of cash comes amid a pandemic that might derail some of the progress seen in the country in shifting toward other forms of payments — particularly card-based payments. As noted in this space just over a year ago, at least when it comes to in-store transactions, as estimated by EHI Retail Institute, 48.6 percent of total value came from card payments, slightly outpacing the 48.3 percent done in cash.

There has, of course, been growth logged in online transactions spurred by COVID-19 as lockdowns and reopening became part of Germany’s landscape. Statista noted in forecasts adjusted to reflect the impact of the pandemic that overall revenues from eCommerce to be the equivalent of USD $87 billion, up 18 percent from the year before. Drilling down a bit, Statista estimated that cards will be 23 percent of eCommerce sales this year, eWallet at 28 percent (up a percentage point year on year).

For the FinTechs looking for greenfield opportunities to transition cash-reliant markets away from, well, cash, the opportunity is there — but so are the challenges (well beyond the spectacular flameout of Wirecard).  That may be behind the relatively sedate pace of investment activity in FinTechs there, in terms of aggregated data.  As estimated by, using Crunchbase across more than 10,000 FinTech deals across the years, the US was the home base of more than 1,490 startups, and funding of $58 billion.  Germany trailed at seventh place, with 100 FinTech startups and $3 billion in funding.

Within that tally, as reported by PYMNTS in May, German challenger bank N26 closed a Series D funding round of $100 million.



Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border. Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.