Why Germans pay cash for almost everything
qz.com
qz.com
> "of course, [the Germans] attitudes toward currency must owe something to Germany’s tumultuous monetary history. During the Weimar-era hyperinflation that peaked in 1923 [...]"
> "the German tendency to settle up in cash undeniably reflects the fact that for much of the last century, Germany has been either on the brink of, in the midst of, or struggling to recover from, disaster."
As a German I call that theory into question. Our currency has been stable for 60+ years. It would've been nice if other countries with recent disasters (war, hyperinflation, sanctions) and their attitude toward currency was compared against.
In fact it is rare that I ever carry cash. The same is true for a fair number of my friends and family as well.
But otherwise I'm in the same boat. Amex for everything I can possibly use it for, Visa for places that don't take Amex, Visa debit when I'm under a CC limit.
In London you can't pay for a bus with cash any more.
Now try catching a bus late at night after the shops close - what a silly system.
You don't need to buy an Oyster card as contactless bank cards work on Oyster systems as well.
> Now try catching a bus late at night after the shops close - what a silly system.
London is a 24 hour city. :P
I use a credit card to pay for a $1.25 coffee. I never have cash, partly because I forget to take some out.
I still use cash, probably more than the average. There are just a handful of situations - paying for a newspaper, or at my local bakery - where it feels more 'natural' to me to use cash, but I'm sure that feeling will go eventually!
[0] https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country...
From what I can tell from other sources, what it really means is that one must pay VAT when purchasing stuff with it.
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HN throttles comment time. Annoying. I don't want to give away my ideas/time enough to tolerate shit like that!
http://www.bbc.co.uk/schools/gcsebitesize/history/mwh/german...
(Please write "at".)
I don't remember th@.
11 years ago, when I was living in Istanbul, I had bought bread from a supermarket and I paid with my credit-card, vendor of which had a deal with that supermarket-chain and automatically divided the payment of the bread to 10 months. If I remember correctly, they later banned the postponing of the payment of basic goods because it was getting ridiculous.
Now I realize that if your account is used without authorization most banks refund the money. This can take a certain amount of time and could lock up your remaining funds in the meantime.
I noticed it on Thursday, I had the new card and all unwanted transactions rolled back on Monday.
This for a debit/Visa hybrid card, which acts as Visa out of country and on the Internet.
Also, the bank requires me to temporarily unlock the card for 'unsafe' Internet purchases before usage, which basically is all purchases that don't involve 2FA.
I know I can charge back. But then I need to waste time to check all the charges and go through the charge back process.
Also depit cards. At least in Europe. AFAIK don't offer a easy charge back at all
At the same time, though, the govt did push Lloyds TSB to take over HBOS in 2008 rather than let the latter fail.
There is zero practical difference if you withdraw from an ATM every other day or more often, so you can pay cash.
Those claims are made to increase trust and lower market interest rates for companies to borrow money but regularly failed once really needed.
From some aspects, yes. From others (no interest in purchases, directly reducing one's account balance, etc) they are the same.
>There is a huge difference between having currency in your hand or use a medium to access money held by the private organization that can go bankrupt (and this happens much more often than, for example, governments with their currencies).
Still not often enough to matter, especially since the cash one has at hand will be a limited amount anyway.
It's not like having $100 or $300 in your pocket to buy things (as opposed to using a debit card) really protects you from the "private organization that can go bankrupt", when the large majority of your money will be in some bank anyway.
Except if you propose we keep all our money in cash at all times. This has other issues, not just a government going bankrupt, but inflation, theft -- and those things are much more common than a bank going bankrupt.
1) People forget to pay it off before the final date. They're not always clear about when that date is; you know exactly how long it's been since the charge, but you don't know for sure when your payment will be applied. It's best to pay the total off at least a month before the final date, to be sure it's paid during the billing cycle before it is due.
2) If you use the card for anything else, there's fine-print that says that any payments will go towards non-promotional charges first. It can get very difficult to determine if you've paid the promotional charge off or not, and they typically do not assist you in figuring that out.
They also benefit from extending you more credit than you need for the one charge you want to make, especially since you're unlikely to use it in order to avoid trap #2. And they benefit from having an additional customer on the books. I'm sure these benefits make them money somehow too.
One big difference in Turkey is many shops had 5 or more card terminals, each in the colour of the issuing bank. Banks competed for both merchants and consumers by offering value-added features unique to their terminal, such as instalment credit instantly accessible to only their customers.
Instalment credit was popular in Turkey following the economic crisis in 2001 (3000% interest rates) because many people simply didn't have the cash to pay up front for major purchases such as whitegoods or even shoes.
In most other countries, shops have only one payment terminal, supplied by the acquiring bank (acquiring = acquires payment transactions, as distinct from issuing = issuing payment cards to consumers). That terminal has to support all cards equally, using the base Visa/MasterCard standards. Hence there are no value-added payment options.
Also as a German, OUR currency has been stable for 26 years.
I'd still question the theory.
The Euro transition was stable.
a.) I mostly pay cash because it's faster
b.) some shops that can afford it only have cash payments to save on CC costs
Not because of inflation or because something happend 100y ago.
a) I don't want to feed the Visa/Mastercard/Amex/Whatever leach earning a few cents of every transaction.
But if banks wanted, they could actually track the serial codes on the bills around. And since often cash is used in only 1 hop (so ATM -> you -> shop -> bank) they could know pretty well where you spent your money.
A quick reference: https://news.ycombinator.com/item?id=9948081
E.g. about China: "According to schedule, by late 2015, the serial number of every Rmb100 note withdrawn from banks by members of the public can be traced."
That doesn't include how much you spend exactly. And it only works most of the time (what if my money gets used as change for another customer?).
Also, been a couple of times in the situation where either the shop's card terminal was malfunctioning, or the bank had some issues, and the card payment was impossible. Without cash you'd be helpless in such a situation, whereas cash = power & independence.
There's the labor costs of handling cash - counting it, moving it, organizing it, accounting for it, making sure there's enough change to run a shift; the cost of storing and transporting it - safes, cash draws, key management, money transport/money transport companies; and the cost of loss due to theft, mistakes, and mismanagement.
I'm not saying that the cost of cash is more than the cost of card, I'm simply saying its not anywhere near free.
https://qz.com/123642/physical-money-costs-americans-more-th...
>But new research from Tufts University aims to highlight the pain points of cash, where digital currency can break in. The use of physical bills costs US consumers, businesses and the government at least $200 billion each year—about $1,739 per household. Here are the main reasons why:
>Small businesses don’t lose much money by operating cash-only. But larger businesses spend a significant amount of money dealing with cash—collecting it, sorting it and getting it to the bank without it being stolen. US businesses lose $40 billion a year to cash theft and loss, about 1% of total revenues.
http://baltimore.cbslocal.com/2017/02/02/cashless-coffee-sho...
(There's also a potential to increase sales by accepting card.)
https://qz.com/123642/physical-money-costs-americans-more-th...
>larger businesses spend a significant amount of money dealing with cash—collecting it, sorting it and getting it to the bank without it being stolen. US businesses lose $40 billion a year to cash theft and loss, about 1% of total revenues.
Cash workflow:
- Cashier tells you the total amount
- You look in your wallet/purse
- You spend time counting exact change if you do have it
- If not, you take out a rounded bill/note (say $20)
- Cashier takes the bill/note, punches in the register and then spends a few seconds giving you the change back.
Credit card workflow:
- Cashier tells you the total amount
- You look in your wallet/purse
- You swipe card/insert in chip reader
- Done
- You look in your wallet/purse
- You swipe card/insert in chip reader
- You avoid making eye contact while the transaction is processed
- (optional) The card reader fails and requests reinsertion. Repeat previous two steps
- Done
Disclaimer: I've seen exactly this a few times
> - Cashier tells you the total amount
> - You look in your wallet/purse
> - You swipe card/insert in chip reader
> - Done
You forgot the part where you have to enter you PIN and wait for the transaction to go through, or sign the receipt.
That seems an easy way to get your merchant account cancelled very, very quickly.
Even if it did, the bank is likely to block the transaction, or call/text for verification.
I heard that those are very easy to crack. It might have been this article from 2011 where I read about this (German, sorry): http://www.zeit.de/2011/21/Kreditkarten-Sicherheit
So 70% of the time it saves time and 30% of the time it wastes time. Then I broke my phone and bought a replacement without NFC so I don't have the option anymore anyways.
It's a great system, however, I think the kinks need to be worked out a little.
(I had a Nexus 5x FYI)
That's true only if you or the credit card company notice the fraudulent transactions and act on them within the limited grace period, which I believe is something like 3 months.
Many people don't actually keep their receipts or reconcile them with their credit card statement. So unless they get an unexpectedly huge credit card bill, they might not even notice that they were victims of fraud and in that case the "0 liability" credit card policies are worthless, because they get defrauded anyway.
I have to verify any transaction over 20$ with my Swiss credit card for example. Even on contactless
Historically if in the US if someone gets a hold of your card, if I report it as soon as I know there is a problem you are legally out $50, and the credit card company and merchant has to eat the rest of the loss. In most cases the credit card companies figure since they have to take the rest of the loss they may as well get the customer service points by taking that $50 as well. As such it is only a minor inconvenience if someone gets a hold of your card, most of which is related to waiting for them to mail you a new one. Because of this people don't care about chip and pin being more secure: security was not their problem. This is also a factor in why the US is much more likely to use a credit card: there are no anecdotes about someone losing a lot of money because of their card.
By contrast in Europe you were liable for all amounts charged on your card before you report it, even if you had no way to know about the charge. Since the credit card companies didn't have to take a large risk they typically didn't agree to take it on. As such a credit card is much riskier, and so it is prudent to not use your cards if you have a different option. When chip and pin came out consumers were interested because it gave them some ability to limit their loss: their chip/pin card could be lost without the potential of great loss.
Note that the above is historical, and like all generalizations is false in some way. Laws change all the time which means the current reality is probably different - but the historical reality is still shaping our world. Europe is not a country, each country in Europe always had their own laws which differed in some way from the next.
Cards are definitely more convenient.
That's rarely the case. I can only think of dm (a drugstore) which rounds all prices in 5 cent increments. Otherwise you see a lot of prices ending in 8 or 9.
Also, there are several chains (Netto, Rewe, Kaufland, etc.) where you can round up your total to the next-higher multiple of 10 cents, and the difference goes to charity. I always use that if possible to avoid Buntmetall (i.e., 1/2 cent coins).
People pay with rounded bills most of the time, cashiers are fast at returning change (amounts are usually a single cent below the full euro for each item, so change isn't a big problem).
The credit card workflow requires you to sign as well (or alternatively sometimes your pin if it's a debit card). Also, no swiping, only chip readers.
So in essence, taking out the bills is comparable to taking out your card, and the question is whether signing/entering pin is faster than the cashier giving you your change.
Of course occasionally you will pay in exact change, but that's balanced out by all the times you have to insert your card a second time, followed by trying another card.
Standard on most bank cards in the UK. No pin or anything. Tap it on the machine and you go. Takes 2 seconds at most.
Still, I do hold cash sometimes, you do need it in some cases.
[0]: In contrast to e.g. Rewe which is also mostly operated by independent merchants but has strict rules for those.
It's faster, and the app gives a list of the purchases you've made with a card, so I can track what I'm spending relatively easily. Unfortunately, there are still lots of stores that haven't upgraded to contactless yet, which means I can't rely on Android pay for the time being. I can see this being much worse in Europe where contactless payments aren't implemented in many more places than here in Canada.
A) there is a risk as everyone can create a stripe account and buy a charger. Personally I would never notice.
B) every transaction creates costs. Some visible (depit charging fee) some hidden (credit transaction fee)
C) At least in most of Europe it is far from widely supported, even thought it's growing for a while now. Except you stick to the most touristy places that is. In south east Asia I haven't seen it at all except in tourist focused places.
Personally, the convenience of: not having to wear a wallet at all (I just carry the card in my pocket) and not having to deal with coins, negotiate if I'm paying a big bill etc. is just amazing. Even if someone steals $10 from me once in a blue moon, it's well worth it.
The credit card never really saved me. It really just is there to make life a little easier.
When I tried using my debit card and they ended up taking the money and then refunding it over a week later.
You're right about the cashiers though, they're super quick.
The good thing about the card is that you hand it over, and while the reader is talking to the bank you have a few seconds to continue packing your bags. I've simply found it flows better with card every time, as long as you remember which checkout has the dicky card reader that needs 3 tries.
I've never had to sign in the last couple of years when using my credit card. Fewer smaller shops would take it than in the UK, but otherwise I never noticed any difference.
1% earned when spending
1% earned when paying the bill
Cashback is not immediately applied to the balance so it's actually 2% and not something like 1.9999999. No annual fee but it's not really worth it to apply for this card per se, better to get another card that comes with a signup bonus (this one never does) and "product change" it to this card by calling in.
On the other hand, if you use credit cards, you would ideally be keeping receipts and then reconciling them to the statements you get from your credit card company to make sure there's no fraud and no errors in billing. Some people have the discipline to do that, but many don't.
With credit cards it's easier to overspend. Not only can you perhaps too easily borrow more than you have in the bank with a credit card, but temporarily giving someone a card that you get back right away or giving them a credit card number doesn't have the same psychological impact as permanently and irrevocably giving someone your hard-earned cash. So people are tempted to spend more when using credit cards.
Finally, there's the issue of being tracked. When you use credit, at the very least the credit card company knows where and when you shop and possibly what you buy. With cash you could have more privacy in this respect.
Also, I feel really bad for the cashiers that are unlucky enough to have all that change dumped on them and are forced to count it all. Some banks have change counting machines, but surprisingly, many don't and the change is still counted by hand while you wait.
Of course, just take it to the bank and they'll do it for you for free.
also i use it to get some change for the occasional buns
- Cashier tells you the total amount
- I get a 10 EUR note from my trouser pocket
- Cashier gives back money
- I put money in trouser pocket
- Done
- Home: I put all spare money in a large glass jar
Credit card workflow:
- Cashier tells you the total amount
- You look in your wallet/purse
- You swipe card/insert in chip reader
- You insert PIN number
- You shield your PIN entrie from the people next to you
- You tell people too close to back off
- Chip reader did not work because of humidity
- You insert PIN again
- You tolerate the angry stares from people behind you who think you're either stupid or broke
- You wait 5 sec for transaction to fish
- You put card back in wallet
- You put wallet back in trouser pocket
- Done
However, there's a pretty large market for credit/debit card transaction data. Even Google purchases it[1]. Both your credit card company and the payment processors/networks themselves are able to monetize this data quite effectively. And the more complete people's transaction histories get the more effective this data becomes for different uses and the more the companies can charge for it.
Depending on the demographic a particular card is able to capture, the transaction history may be valuable enough to run the rewards program at a loss or break even when looked at purely from the merchant fees recouped.
[1] https://www.washingtonpost.com/news/the-switch/wp/2017/05/23...
in the glorious lands across the ocean, chip cards of all kinds use a PIN instead of a signature, which makes way more sense anyway. Chip & sign is an American abomination.
When I was in Seattle at a restaurant trying to pay, the owner told me that they also couldn't accept tips if they used chip cards. I thought she was BSing me into paying cash but she tried to swipe the card instead so that I could.
It's amazing how, in the US, even the implementation of new technologies is broken and awful.
In the USA, its rare that you'd have to sign for anything under $20.
Because of this, credit cards in Europe tend to not have the same great benefits you can find on cards in the US. AMEX is pretty good still, but there isn't exactly tons of competition in the credit card space here.
Also because if my card gets stolen, I'm assured that my pin wasn't lifted by camera or keypad shim. The signature will be not present or not mine on fraudulent transactions, so I can tell my card issuer to fix it and not worry about them telling me I had "poor PIN security" or that it was somehow my fault.
For financially responsible people, that means you can sometimes get a few freebees if you're willing to deal with the hassle.
I don't know what it's like in most other places, but debt is a weird part of culture here.
I do get lots of junk mail for credit cards, have done for decades, so I could get one tomorrow if I desired. But I don't see any real value in doing so; why get into debt if you can avoid it.
I never spend my own money directly unless I have to (e.g. the merchant doesn't accept AMEX or only takes cash etc.) because should I end up with fraudulent transactions or lose my card or whatever it may be, I have actual cash to back it up.
If you're fiscally responsible and make sure to always pay off the bill at the end of the month (with all that money you didn't spend) then credit cards are pretty much nothing but benefit. There may be a yearly fee associated (my card has one) with it but I've found it to be worth it for the benefits alone, but I also rack up so many points that I can use those to pay for the fee.
You can call your bank, get your card switched over to Freedom™ mode and enjoy faster payments.
Might not want to do this with a debit however.
(And I did complain to their customer service, but they won't change the setting).
- Cashier asks if I'm paying with a credit or debit card.
- Cashier enters the total amount into POS terminal. Meanwhile I pull my card from wallet.
- I tap the terminal with my CC.
- I put my card back into wallet. Meanwhile the cashier asks if I need the receipt.
- Optionally: take the receipt.
- Done.
- Cashier gives you the total - I pull out the bills I have and find the best denomination - I get a bunch of change back I have to stuff into my pocket along with my bills while getting my stuff out of the way for the next person
Credit card workflow: - Cashier tells you the total - You say "debit" or "credit" and the cashier pushes a button on the register - You pull out your credit card, touch it to the machine, and then put it away and start packing up your stuff to leave - The machine beeps and you leave
Far less fuss, far less opportunity for dropping change. Simple and efficient. I have my card out, tapped, and back within 5 seconds and my transaction is complete, and I never have to worry about if I have enough or too much.
I pay with my banks card (not a credit but a debit card) and then ask them for cash on top of the groceries. I am often the only one paying with a card if any kind though.
that way i have cash for all the things were paying with a card is frowned upon in germany:
- eating out - going on a fair - getting ice cream with the kids - going to the public pool with the kids - giving kids their allowance :)
and other things of that nature
PS: Since cash payments make it difficult for marketers to 'understand' their customers there are a number of cashback card systems like 'payback' in germany which try to get people to identify themselves.
Some places like Starbucks seem to get it right. Swipe card and go.
Target however likes to hit you with all the options. Self checkout is even worse.
- Cashier tells you the total amount
- Since I was watching the register display, I already have a rough idea how much this will be, and I have prepared the bills to hand over.
- Cashier gives change and receipt
- I walk away, and after I'm out of the way, I put the change into my wallet.
- Done
Similarly, credit card workflow (American):
- Cashier tells you the total amount
- You insert in chip reader a card you already had out
- You sign, sometimes
- You wait 5 sec for transaction to finish
- You put card back in wallet while receipt is printing
- You put wallet back in trouser pocket while receiving receipt
- Done
The time spent on these is very, very similar. Being prepared with your form of payment and dealing with putting away the results (change, card, receipt) after you leave the line results in a very similar time. Signing (or pin) and waiting on the transaction takes a comparable amount of time to the cashier counting your payment and making change. In each case, less than 15 seconds, and at that point, who cares?
- You get asked if you want to donate to (charity/cause)
...
- Cashier types in the total to the EFTPOS terminal
- You get your wallet
- You remove your card
- You tap your carda gainst the contactless reader, which registers the payment in about 1 second not 5 as you describe
- Cashier asks 'would you like a receipt for that?'
- You say 'no receipt, cheers mate'
- You put your card away
- You put your wallet away
If you pay over $100, you enter a pin and it takes maybe a little longer because no one crowds around each other at the payment area so there's none of what you describe and it always works despite the humidity you apparently describe.
As we don't have a tip culture, we don't see donation/tips/etc. prompts as others describe. It's only ever whether you want a receipt, and that's a single button press and you can pre-emptively say no to that so it doesn't even slow you down. Cash definitely takes longer here.
- Cashier tells me total amount.
- I get my card from my wallet.
- I hold the card near the terminal.
- 2-3 seconds pass, terminal goes "Approved".
- Done.
It's easier than cash. Almost every store I went to had wireless card terminals, even coffee shops and supermarkets.
also its always a guessing game whether you have to enter a pin or sign. it seems a random distribution. same shop, same amount, sometimes pin sometimes signature.
PS: I am not saying its good or bad, just trying to give people a feel about some of us Germans
I like Paper Cash / Notes. I dont like Coins.
Another Reason I like Debit Card or NFC Recharge Cards like those in Japan is that they actually require me Charge the card first. This action will live in my subconscious how much I have spend. I know this is an unpopular motive in US where they just want you to spend and spend.
And Getting rid of Cash ( The so call Cashless Society ) is like having less freedom in a what is already less free world then before.
- Done.
- Total amt
- (After deciding which card is best) Get card out
- Swipe, but piece of shit card reader complains, so retry. Or insert chip, then the piece of shit card reader makes the same sound for "wait" and "remove", sometimes cauing confusion.
- Wait for piece of shit card reader to show up signature bar (or less commonly the cashier has to print out a receipt and have you sign it)
- Done.
I love credit card rewards though, but I'm not sure if it's a zero-sum game.
- Waiter brings check
- Leave cost + tip
- Leave
If you pay with card that's an extra trip from the waiter which can take a pretty long time.
You can make it explicit, by having a card visible when you ask for the bill.
They take your card away and bring back a card receipt for you to sign & leave a tip on.
There is no practical alternative, since the customer needs to input their PIN.
Dishonest waiters used to be considered a common way for card details to be stolen.
Example: https://www.paymentsense.co.uk/card-machines/portable/
The new contactless payment system is faster, unless the store does something stupid ... like wanting to do a customer database lookup before doing the actual transaction which one chain here in Austria unfortunately does.
Now though we have NFC tap-to-pay in Canada and it's wicked fast in comparison to everything. No signature, no PIN entry, connections seem much faster.
Which is annoying and time-consuming.
I wonder how come these types of machines aren't more popular in other countries.
[0] sounds like some super fancy concierge service, but it's pretty much standard, from 7-eleven to fancy stores
In most EU countries, the item would be priced at €10, you would pay with a €10 bill and move on.
Cashiers with decent performance will take a solid bill like a twenty and give you back your change in a few seconds. If you want to give specific amounts of change, that adds time but so does when you split credit cards to put specific amounts on them. If anything, the cards can take longer since the transactions are separate. Wise users of cash also already have most of their money ready for payment by the time the order is totaled since it saves them time.
So, for most orders I see, the cash and credit take about the same time if customer is moving decent speed. The only difference is if the customer is moving slow for whatever reason (eg indecision or fumbling for stuff). That can happen with either but happens more for cash since credit users look for one item (the card).
In Germany you always have to insert your PIN or sign the bill if you want to pay by card (we use debit cards mostly, credit cards are very uncommon).
I can also second the opinion of many other commenters that the privacy implications of credit cards, especially the RFC ones which allow for invisible tracking, is a huge turn down of card payments in Germany.
And last but not least, as a developer, I gotta vent some air and complain that credit cards payments are huge pain in the butt, because of all those pesky special cases that arise from fraud prevention and risk reduction. Which isn't necessary for any sane payment method which can collect money directly from your bank account without the possibility of any charge-backs. This is one of the core reasons which persuaded me a European Fintech Startup Scene is necessary, so that Stripe with its CreditCard-centric API doesn't stand uncompeted.
That doesn't make sense as a premise. The US wasn't lacking in experienced cashiers 15-20 years ago when cash was still king, nor today. There was a decade or more of time where the US rapidly transitioned from cash-heavy in stores over to card-heavy, the cards were universally faster unless the store ran a behind-the-counter swipe machine that the cashier had to use. The premise would have to be that in an economy with a super high GDP that has an extremely large service sector, America has especially slow cashiers everywhere (for no apparent reason given the extraordinary economic output overall). It's more than a reach.
Cash can be faster because you do know the total before hand since the price on the menu/price tag is what you pay. This is because there is no sales tax or tipping. Buying 3 items at HK$12 each? Your total is HK$36. If there's a queue I usually have my exact change ready before I'm to the front.
In the US, you can rarely tell how much you'll pay since sales tax varies by county or sometimes by city.
A side effect of this is weird totals like $23.76 that result in lots of hard to spend small change which also disincentivizes cash use.
- Tap phone (that's already in your hand because you were aimlessly swiping while standing in line) to terminal with finger on fingerprint reader while cashier is ringing up items
- Tap confirm and sign once all items rung up
- You hold your card/device near the screen for about a second
- It authorises in a few secs
- Done
On a short trip last month, I surprised a couple of merchants by paying contactlessly with my foreign (EU) card.
That's almost always faster than paying by cash, since there's no need to count the money or make change. The exception is when the cost is €20, and I can hand over a single note.
They are absolutely everywhere since last year more or less, but everybody (esp. cashiers) is always dumbfounded when I use it and it works. Also some of them try to handle your card for you "to insert it in the right way" and since my German is still rather basic I then have to weigh the potential time waste of explaining it's a contactless card with the extra 4-5 seconds for the chip transaction. But I guess that part doesn't really apply to locals.
("kontaktlose karte, nicht einstecken" but they don't listen the first couple times)
Some stores have fucked up the speed of it though by first checking for your store membership account on the card which ruins the flow of the transaction. Often forcing the whole thing to be repeated. It's infuriating.
- fast enough
- no problems with failing electronic payments of all kinds
- more places where it works (electronic payment systems can indeed be an extra cost which matters for small businesses)
- cash doesn't break (cards do)
- still easier to transfer directly between people
- pretty private
a) That's a good joke. From faster to slower: NFC > PIN > signature > cash.
b) You should look into the real cost of dealing with cash. EC is stupidly cheap since it's basically the cost of a SEPA direct payment (we're talking 1-2 cents per transaction). Debit card payments can also be pretty cheap in Europe. All those annoying restaurants and small shops that take only cash do it to dodge taxes, not for any other reason.
For cash you have to count and recount that cash at the end of the shift, and then the bank counts are recounts it again. This is a significant amount of labor. By contrast with a card once the initial transaction is done everything is put into the computer electronically and no human has to look at it again.
Also cash is subject to theft. In some locations this risk is a significant part of the transaction costs - not just the cash, risk of death in the robbery. Electronic payments are subject to loss, but generally there is a trail to chase when it happens, and the possibility of death is much less.
Until 2016, the costs were 30€/mo+0.125% for EC, 160€/mo+4% for VISA and MasterCard, 160€/mo+7.5% for AMEX in Germany.
Most German merchants run on margins below 1-2%. Good luck paying 7.5% transaction fee on a margin of 1%.
This is why EC was far more widely accepted, although even that was too expensive for small places, such as farmers selling stuff on the market.
Such studies have also been used to arrive at the EU interchange cap.
[0]: http://www.steinbeis-research.de/images/pdf-documents/CFP_Co...
But yes tax avoidance is a huge problem in restaurants in Germany.
SEPA is the Single European Payments Area, standardizing how to process fast and cheap payments, all transfers are in Euro, from 2018 on also having a standardized API between banks, wire transfers are free or below 1 cent each, etc.
Well, it is used (almost all major stores and large grocery chains support both Visa and MasterCard), but Girocard is far more widespread.
And members of both have reservations against MasterCard and VISA, due to what happened with Rossmann a few years ago (Rossmann sold cuban cigars, as punishment MasterCard, VISA and PayPal seized Rossmanns funds and suspended all payments), but as EC was also bought by MasterCard and merged with the Maestro brand, currently there's no option but to continue on.
Personally, as member of both the REWE eG and coop eG, I'd support a move away from CC to any national or EU based payment system as soon as possible.
Rewe has a fairly complicated legal structure, I'm not sure which you are a member of. There is no single "Rewe eG" which you can just buy into, especially not if you don't happen to own supermarkets.
EC was not bought by MasterCard, the brand was always owned by them (though there have been various mergers). The system behind those cards was not merged with Maestro (which is a different system) but merely rebranded as Girocard, an independent scheme by the German banks. It works without any reliance on MasterCard.
I'm personally not sure either. Originally my entire family was just a member of the coop eG, but when they started to merge with REWE eG in the past months the coop eG offered an option to invest additional money into the REWE eG (at better than usual terms). So we did.
https://www.shz.de/regionales/schleswig-holstein/tschuess-sk...
So now we have some stores that have just been rebranded REWE, some still branded Sky, operating with the same mix of REWE and Sky products, and some accepting CCs, some not.
> The system behind those cards was not merged with Maestro (which is a different system) but merely rebranded as Girocard
In marketing, EC stopped being the main brand, though, and MasterCard provides their EC cards under the "Maestro" brand within of Germany, although they are not operating over the Maestro network, or in any way compatible with it. Take any recent EC card, it'll work only via the EC system, say Girocard Electronic Cash on the back, and Maestro on the front, but doesn't actually have any relation to the Maestro system. That's what I was referring to with the rebranding.
SEPA is the single euro payment area. Here it refers to the cost of a wire transfer.
Now that we are talking about card payments (NFC, chip and pin, etc.): jump into a random Frankfurt taxi in 2017, and IF they are willing to take your card (pretty big if), this will be their method of choice:
http ://fernandodecordoba.es/wp-content/uploads/2012/04/bac1.jpg
They put your card in there, put a paper on top, and proceed to press and copy the embossing of all you card numbers into a carbon copy paper. Talk about swipe card insecurity... That is by far the slowest way, you spend 5 minutes easily.
I agree with the laundering / tax evasion cause only partly: I once wanted to pay upwards of 900€ in IKEA with mastercard. The cashier asked me to go to an ATM that was inside the IKEA building, take out cash from the card, and pay with that. With its scale, I don't think IKEA prefers cash to launder money or evade taxes...
Eurocheque hasn't existed since 2003. The current system is Girocard (https://en.wikipedia.org/wiki/Girocard), it's just that the colloquial name is still "EC".
In most countries, we just tap to pay with NFC (except America, where this only works with Apple Pay or Google Wallet). This is most definitely faster than cash. You can actually go to any store and time it on real customers.
In addition to a.), I like having full control of my money and not be dependent on some third party when making purchases.
Every cashier in Germany (provided they accepted cards in the first place) insisted on "taking" my card, sticking it in the machine for a non-contactless payment, then hand me the machine so I can enter the PIN, then take back the machine, wait for the transaction to finish and then remove the card from the machine and hand me back my card. If that's the standard card-experience, I can imagine why you think cash is quicker...
(At one shop I saw the machine accepted contactless; before the cashier could take my card I quickly paid contactless. The cashier was 50% flabbergasted and 50% upset and seriously doubted I actually paid, until the receipt rolled out to prove it).
I guess Germans are generally very precautious and wouldn't trust contactless debit cards.
Contactless cards also typically have a per-transaction limit in the area of $100~$200, so the amount of damage someone can do without the PIN and before you cancel the card is quite limited. I actually wouldn't be surprised if you do too many transactions in a certain period of time it would ask you to do a PIN transaction.
Again I owe to my colleague for my lunch because I forgot to pick money in the morning.
> stable
Plus fraud is becoming rarer with chip credit cards(and apps which allow you to lock your card much faster in the case of theft), while counterfeit bills are also harder to reproduce these days you can still find some.
So credit cards took off in US in 80s but half of Europe just got out from under communism in early 90s and they were not very trustworthy of western banks so would prefer cash.
Also the banking and payment infrastructure was non existent so needed to be built from scratch. This probably slowed down uptake of credit/debit cards considerably.
Cash is still king in Eastern Europe today.
If privacy is such a concern (and particularly privacy from one's own government), then the use of cash makes sense. My guess is that this distrust of government did grow from the abuses of domestic surveillance by the Nazi regime and East Germany. I'd be curious to see how this breaks down between the old east/west lines as well.
And I'm sure individuals don't use cash for these reasons; but because the system in Germany functions that way out of historical legacy. As a consumer, it's simply easier to buy things with cash.
Not only do they lag in general, but I also remember a study which showed that in Germany higher education levels are associated with significantly less social media use, while it's quite the opposite in the rest of the world.
I had it installed for a few days once. I decided to uninstall it because it took too much attention (there are MANY users in Berlin) and I kind of felt too old. The typical user is a student in the first few semesters.
Older osti don't see it that way. When I say "older" I mean "everyone over the age of 40" so not really that old. They've seen their currency change.
1) CC is slow, at least in Switzerland. Like in Germany, efficiency is baked into the culture - people hate to wait on someone paying his chocolate bar with credit card. It's also not rare for people to show you that discontempt. This trains people into behaving.
2) Switzerland, as most of Germany, is a mostly urbanized place with good public transport and facilities close to where people live. Meaning, there's way less weekly mall-shopping going on than in less dense countries like the US or France. So, the average total price is lower since shopping trips are more frequent, often about every second or third day after work.
3) Security concerns. For a long time CC were as insecure as the US ones, with a simple swipe of the magnetic stripe being sufficient, and CC fraud was relatively frequent. So, many people have an instinct of only using CC when necessary, and if at all possible not in public places. Debit card on the other hand have always been relatively secure (6-digit pin code, 3 tries), so they are used more often, maybe more so than in the German example since Swiss banks have pushed them since around 20 years ago.
Your card info stays safe When you use your phone to pay in stores, Android Pay doesn’t send your actual credit or debit card number with your payment. Instead we use a virtual account number to represent your account info – so your card details stay safe and secure.
So, just as trackable as a credit card number. Or are virtual account numbers unique per transaction?
As a cash-paying German I think that the main appeal to me is that cash payments are a process you can easily understand in its entirety, whereas everything else comes with an infinite supply of unknowns big and small. Sure, it's easy to grasp the basic and get adequate working knowledge, but there will always be lines in the fine print, lines in the code and lines in the physical specs of the hardware that you never read and even if you did you may not have understood correctly. You don't have to worry about these things, but you could, and that seems to be enough for many to stick to what they know.
Also, not paying cash feels lazy, some stereotypes might apply. (Now I wonder about the possibility of a correlation between cash and the protestant/catholic divide still present as a cultural shadow of the past even amongst decidedly atheist Germans - payment customs in the nordics suggest otherwise though)
While the CC may or may not be slow. In the 5+ months I've now been living in Germany, I've noticed that people are very keen to pay with exact change if they can dig it up. This is an even slower process, but also seems to be the norm.
Only works if the amount is less then 25 EUR but still it is much faster then cash.
Definitely not the case in Berlin where cash is king, German bank cards work often, and credit cards are rarely accepted.
I call them "red Netto" and "black Netto" because of the yellow-red and yellow-black color scheme. (The main color is, frustratingly, also the same.)
For my card (N26) I can still use the feature but I'll have to enter my pin. Still faster than sticking it into the slot.
Whatever you think. This is central Europe and visible Badly supported
That's made easier by the VAT system as opposed to the US sales tax system.
Totals are easy to calculate in your head. I'd say this is a stronger driver of cash use than anything cited in the article.
A few years ago I visited Berlin again and tried to leave few cents in local supermarket. It was the only time while being there that I can remember people giving me unfriendly looks. Cashier was also visibly unhappy.
Personally I just throw them in those collection boxes for good things at airports and train stations when I leave the country.
I don't remember any unfriendly looks. But then again, I'm German, so I probably just didn't notice the looks. :)
The cashier's get into trouble if they have an incorrect amount of money in the counter and you're essentially telling them you're too good to bother putting the coins into the donations box sitting centimeters next to you.
If that isnt rude, I don't know what is.
This only applies to big discounters thought. The smallish shops and bakers don't mind at all.
In Austria people often just hand over more and say 'bast scho' (tip). Or otherwise pay a little bigger and take the change. In switzerland it's only the latter and less tipping but again nobody even looks at their own small coins.
Nearly everyone I know just has a glass at home where they throw the small coins in but never would really use them.
Also, American banknotes with their identical size and color over all denominations are just incredibly impractical for anything but building those nice tidy stacks of drug money depicted in the movies. Cash payments in the United States are a terrible benchmark.
Also regarding your third point, anecdotally I have heard that many smaller shops/restaurants are now pushing for non-cash payments as it is more difficult for employees to steal that way.
In Sweden and Denmark there are many places where cash isn't accepted. Come to think of it, I was on a business trip to Frankfurt last week and the restaurant we ate at only accepted cards.
e.g. when buying train or tram tickets the printing of the ticket takes much longer than the payment step.
I pay with my card faster than the vast majority of people with cash. I also worked as a cashier during school, my favorite people were the older ones who'd just hand me their wallet so I could take the best mix of coins for the payment. Most people are horribly slow when trying to pay optimally.
Anyway, at least here in Germany the whole NFC thing seems to be taking off and card payments are even faster now.
If anything, the CC statement gives you an objective summary of your spending, in case you want to recall something 10 months later, or budget for the future. When you pay only in cash, it will be a burden to keep the receipts, organized and readable, for that long.
Plus, isn't it less hassle to use a credit card rather than visit the ATM every so often?
In the US, I always wish they had non-cash lanes at grocery stores (especially at Costco, Walmart) because paying cash is almost always a super slow process.
Do prices and taxes in Germany for stuff usually end up in whole numbers? I think in that case it's easy to calculate total owed and be ready with the exact amount of cash.
So you add the numbers up, pay that much, and get 0.0x back, where x is the number of articles you bought, usually.
In fact, it is way faster than me trying to find the right coins for the chocolate bar.
It worked, but it was a much slower process than was I was used to. I guess the stereotype of German super-efficiency made me assume they would be quick to adopt such technologies. But I think perhaps that is countered by a degree of conservatism about switching away from systems that are understood, and proven to work.
Often heard (from Germans with some international experience and its point of view) that innovations need around two years to arrive in the heads of Germany. Skepticism towards new ideas tends to impress people more than open-minded consideration of new developments. This may change at the moment as much of the younger generation gains lots of international experience and is exposed to frequent technological developments and innovative start-up culture.
There is a deep caution against technology here, especially if it's foreign technology. There were numerous attempts by German banks to reinvent the wheel with incompatible payment systems (Geldkarte, ...) none of which could be used for online payment. All of them failed. I would also counter the efficiency argument: having recently visited Norway for vacation, I'm still impressed with the efficiency of grocery shopping where everyone pays with their credit cards. Imho it's a mixture of privacy concerns and generally negative attitudes towards technology.
When I moved to Stuttgart 10 years ago I only could pay with EC card at supermarkets, now I can pay with credit card.
With the RFIDs they even got much faster, I often don't have to enter a PIN or give a signature, just wave my credit card over the terminal and be done with it.
Also I can withdraw money from all ATMs of all banks without any fees.
Looking forward to the day when I can visit Germany without having to go to the ATM.
I think BankAxept is pretty similar to the Danish Dankort.
I paid in cash back home mostly because it's faster. Cashiers are used to calculate the change and quick getting it out. CC/Debit card payments take a bit longer, since you almost only have chipped payments, get the device to work, enter pin, wait for receipt that you have to sign sometimes, etc. I was never pick pocketed on the street, so this wasn't an issue either.
I only started paying by card with the introduction of NFC/ "contactless" payments, since this one is faster.
Also, the UK coins are quite heavy having €10 worth of coins is half the volume at least compared to the old pounds.
"The new regulation will cap interchange fees at 0.2% of the transaction value for Visa and MasterCard consumer debit cards and at 0.3% for Visa and MasterCard consumer credit cards effective as of December 2015." https://www.adyen.com/blog/eu-interchange-fees-cap
That put a lot of credit card schemes (get fly miles or points or cashback for each purchase) in trouble and they had to change their offers. My credit card company wrote back then I can now only earn status miles with their silver card now, at 99 Euro/year cost.
Force?
Merchants are free to sell things for cash only. But they won't - because consumers want to pay in credit cards, and a shop that only accepts cash will lose customers.
You're going to have to explain how this makes any sense at all
To encourage this arrangement, the CC companies offer a kickback to the people who use the card, like 1% in cash back or "points" or whatever.
This creates a game-theory problem where the customer is encouraged to always pay with their card, because otherwise they're wasting a percent or two.
In countries where vendor agreements prohibiting passing the fee onto consumers is illegal, stores are able to ensure that cash payers are not subsidizing card payers... But consumers may rebel at the extra fee for paying with card and choose to take their business somewhere else altogether.
Then there is security. If our guests paid us all in cash, I now have the very real problem of having thousands of euros in cash unless I want to waste an hour of my time going to a bank all the time. Then also in France, there is a law preventing cash purchases over €1000.
There is also a guest security issue – why would you want guests to be carrying hundreds of euros in cash when they travel?
For businesses, cash handling costs money too. There is a time cost, there is a security cost as well. Rarely does an employee skim money from the credit cards, but in shops it happens all the time.
Additionally cash increase the potential for tax evasion, which means that increases the price of government for those who are legitimate.
The credit card fee overhead might be too high, but every form of payment system has overhead to operate & maintain, and there's nothing fundamentally wrong with that.
What are the credit card interest rates in Germany? (In the US credit card interest rates can be 20-30%). Maybe there's less incentive to promote use of cards in Germany, or maybe transaction fees are regulated to make small transactions impractical?
I think I kinda remember some remnants of that when I got my first card and started using it to pay for everyday/trivial purchases. In fact, I remember the real reason for the wait in the line was were most folks taking time to write cheques. It was a lot like waiting for someone to count bus fare on the coinop.
I would imagine however, that over time a personal reputation is gained for writing bad cheques. I guess the difference is whose problem it becomes: a credit agency, or the person who knowingly accepts a potentially bad cheque.
It's funny how we judge each other for using new tools.
If you start paying small amounts with a card, it is too easy and also you don't keep track of your spending rate, you don't "feel" it, so you end up spending more.
(After all, that's the point of it, shopkeepers wouldn't bother losing time and money to offer card payment if they got no benefit from it.)
> "But the real point isn’t that Germans love cash. It’s that—for the same historical reasons—they loathe debt. (Armchair anthropologists have also long noted that German word for debt—Schulden—comes from the word for guilt, Schuld.)"
Sweden has the same culture and words for debt. "skuld", and the saying "Den som är satt i skuld är icke fri" ("He/She who is in debt is not free").
Yet Swedes likes using Credit Cards a lot. But as the author might say we have a lot higher household debt than Germany.
But Switzerland also has high household debt. And as another commenter notes Switzerland has the same cash behavior as Germany. I'd like to see some data on that though.
https://data.oecd.org/hha/household-debt.htm
I do feel like an armchair anthropologist though.
Why not?
In a hyperinflation environment your priority is converting cash into assets as quickly as possible.
The differentiating factor is whether a solution is supported by the merchant. If it is, you will see adoption. Merchants in Germany do not support CCs and limit debit cards, so people do not use them. They do not do that partly because they can get away with it and partly because the fees they are being charged are high (both per transaction and per POS). Naturally there is room for the government to step in here. E.g., said Poland lowered the maximum allowable fee Visa/Mastercard can charge a few years back; along with that went away minimum spending limits on transactions in shops.
This will change though as Germany starts moving to a cashless economy as, e.g., Sweden is doing.
Credit cards are rarely accepted in any store but larger ones in malls. Most Germans, and that was pretty spot-on in the article, don't even have a credit card. You can imagine how detrimental that is to building a German SaaS business. Stripe and the like have started going into the ELV market, which is pretty much a direct debit payment - and you need to pass quite a few restrictions to even be allowed to offer ELV as a vendor.
All in all, it is both a consumer, banking and a merchant issue, and it severely limits the German E-Commerce landscape in terms of payment solutions. Paypal has taken over German online payments, since it can be linked with a bank account. Credit cards? Not so much.
Funny enough, banks are now charging withdrawing fees for cash. So if you only ever buy things with cash, you will loose money on just acquiring it. Net loss for the non-banking economy.
I don't, and I don't see much evidence that anyone outside the e-commerce industry should want to see that.
> Funny enough, banks are now charging withdrawing fees for cash. So if you only ever buy things with cash, you will loose money on just acquiring it. Net loss for the non-banking economy.
It's fairly simple to avoid ATM fees. Every bank and credit union I've ever banked at had a network of ATMs, and there's usually no fee for cash back at grocery stores. In contrast, credit cards always charge a fee to the receiving business. Additionally, many workers receive some or all of their pay in cash, cutting banks out of the equation entirely.
I don't think you can reasonably claim that credit cards take less from the non- banking economy than cash.
It's not universal but extremely common at small shops, super markets, 'better' restaurants. Out of the way places, milk-bars ("bary mleczne", it has nothing to do with milk, it's a cheap place to eat simple foods at), pawn and thrift shops, street vendors, etc. are the majority of ones that don't have it.
In Poland such a limit of 10 zlotys is common-ish (I've seen it ONCE in Warsaw when visiting) but will run afoul of agreements terminal owners have with banks and the fees are (I have no idea if that's true, it's hearsay from consumer legal advice websites) percentages not fixed so there is no difference in the end.
Of course even if that's true the incentive is there - pure cash has no fees and most people buy little things very often so it adds up.
I sometimes do wonder though why you can't just send money to a telefone number like in China. Like in most countries, banks move slowly here.
Very true. Whenever payment processors are discussed around here someone will inevitably mention how glad they are that they could finally replace Paypal with Stripe, and why would anyone still use Paypal anyway these days? I like Stripe as much as the next guy, but in Germany it‘s absolutely necessary to offer Paypal and Stripe can only act as an additional gateway.
However credit cards are gaining momentum here - the online store of my employer almost sees an equal share between both methods. And then there‘s still about 15-20% of customers who opt for manual SEPA transfer.
If the fees for offering card payment for a store are still extremely high, they are getting ripped off by their acquirer for some time now. But old habits die hard and many sale clerks (and even some store owners) are not aware of the changing reality.
Come to think of it, some time in the not so distant future, Germany will probably have the last laugh once the entire electronic payment system collapsed under the Next Big Cyberattack (tm)... insert coin here.
That's not just because of an aversion to debt. German Banks require a much larger down payment for their mortgages. Usually 30% or more.
Banks will also look at the physical age of the borrower. They will not hand out 20-30 year loans to someone in their 60s.
I went all cash a few months ago for everything except hotels and rental cars. It's very liberating. Credit cards give you 3-5% incentives to spend because you spend more. Since going all cash, we spend in average 15% less.
Money is mostly for buying stuff on the street (bottled water, papers).
This explanation seems absurd (or at least counter-intuitive). If your fear is hyperinflation the two things to do would be to avoid hoarding cash that can be worthless tomorrow and to buy as much tangible stuff as possible with a debt you will have to pay back with this devaluated currency.
I also don't buy this cc fee argument. It's regulated (and low) in the EU, perhaps 1-2%. This must be lower than the cost of storing cash, counting cash, paying it in to the bank, transporting it, getting fraudulent notes, people giving wrong change, etc etc.
The other annoying thing is DB machines not taking visa/mastercard and no notes over €10 (though this may have changed recently), which is all you get out of an ATM when you land at the airport. Such a hassle.
I hope Berlin can fix this and the BER airport situation one day.
Of course no one is going to support CC if they can save that much money.
That's a question, but that's not what things look like.
Many German businesses are operating at razor-thin margins, or even at losses. From farmers (which lose around 13ct for every liter milk sold) to small restaurants (often making losses on all of the food, and only minor profit on the drinks) to any other kind of business.
If you are a 4 people company and you're trying to compete (and do so successfully) with american multinational chains, then you don't have enough profits to pay 7% CC fees. You'll be lucky if you can afford the 30€/month + 0.125% EC fees, and many businesses can't even do that.
> If I go to Germany and I'm having a meal with clients I'll phone ahead and see if they accept CC and won't visit if they don't.
Trust me, these businesses prefer not having your business. You'd only make losses for them.
AMEX still takes 7% fees, even today, and even MasterCard and VISA could take those fees in 2015 still.
It's definitely not 7% though, considering Stripe offers AMEX processing for 1.4% in the EU.
Can't see any reason not to accept MC/Visa now though.
Still 10 times higher fees than with the German card systems. If your profit margin is 1.4%, you can't afford 2.2% credit card fees. And if you increase the price, all customers go to the cheaper competitor.
German stores are in a reaaaaal close competition with these things.
I'm not sure about values today, but they don't seem to be much higher if you exclude costs for the actual readers and the connection.
Currently I seem to find for low volume situations only contracts from iZettle and co for 0.95% fees.
EDIT: Just found this Verordnung setting the maximum fee for EC at 0.2%: http://eur-lex.europa.eu/legal-content/DE/TXT/PDF/?uri=CELEX...
> das Interbankenentgelt, das Zahlungsdienstleister bei Debitkartentransaktionen pro Zahlungsvorgang bieten oder verlangen dürfen, beträgt höchstens 0,2 % des Transaktionswerts.
That amount adds up over time.
I'm alright with 1% in direct cash without any fees. That's not a lot but hey, it's beer money!
As far as I know there are no transaction fees on credit cards. That's one of the reasons to stop using debit and use credit. The only fees are on the merchant (1.5%).
Example : https://www.desjardins.com/ca/personal/loans-credit/credit-c... with no transaction fees (or monthly fees) along with 1% cashback.
I try to use cards when I can because I earn Frequent Flyer points, something I wouldn't get using cash. I've already used those points once to fund a Round The World trip (strangely enough, including a trip to Germany).
That being said, yes, they might mark up their products for it. That being said, I doubt it. The retailers I've worked with while developing e-commerce solutions already made enough profits on their products to absorb that fee.
Yet another example of wealth transfer in the US from the poor (who often don't have credit cards, or don't have the high rewards ones because they cost $150+ dollars a year) to the upper middle class.
Yes, in nine states and DC. It was also part of the contract, but the courts struck that down after a big lawsuit.
not really "laws", more like merchant agreements. also, there's nothing preventing shops from offering a cash discount, which is effectively the same thing.
Not sure why people down vote it? then again who cares.
Some cards (e.g. Amazon Store Card) get you relatively high rewards at a specific vendor (Amazon). I predict there are special deals in place with the banks/transaction processors involved that make these rewards more possible.
At the end of the day, the benefits far outweigh the meta-data that is shared. Ok, sure you can see what I ordered at costco and how much I spend on gas.
Yes, it's a data grab by companies, but what are you gonna do... not take 4% back on gas and 3% on restaurants?
More than 90% of my Brick & Morter purchases are in cash up to about $500. I stop at an ATM every couple of weeks and withdrawal $300-$500 dollars and I'm set. Cash is anonymous, quick, a one-time thing (no bills to pay later), and the standard method of payment in the small (rural) stores I frequent.
Credit cards are reserved for buying gas, large purchases, online transactions, and travel.
Treat it like real money, pay every month, literally zero downside.
That said, I imagine rewards in the US are much more attractive than elsewhere, since credit card companies have so much profitability to distribute.
It is also critical to note that Germany has some of the lowest prices for groceries. Shops have hence been very slow in offering credit card payments.
The entire mall was without internet access and, consequently, all credit card terminals, EC terminals and ATMs stopped working. If I had not been able to pay cash (as I always do because of Datensparsamkeit [1]), I would not have been able to go to the cinema that weekend.
[1] Does the word "Datensparsamkeit" have a good translation in English? It's sort of an idiosyncrasy of the German language and the German people. It refers to the practice of protecting one's data by not generating it in the first place. Cash is datensparsam because it is anonymous, hence the metadata of my purchase cannot be associated with my identity.
There's also been a number of suggestions of the kind of economy that we're existing in. The most alarming to me is that we're in a debt economy.
Germany struggled to pay it's abhorrent war debt and reparations after WWI, and I'm curious if rather than the government facing that problem if the population in the US, or China will instead? What is the big picture these pieces of information are trying to tell us?
Should we be taking a more cautious approach when it comes to using debt? (This commentor has no debt, and wants to keep it that way)
I hope that cryptocurrencies replace cards someday.
That day I decided to pay with cash whenever I can, despite inconvenience. I prefer cards or bank transfers when buying expansive stuff, like a car, furniture, a camera, etc.
Maybe we are just more traditional thinking, than others.
Some good alternative reasons where given here.
In my experience, the cash workflow is faster in most situations than our CC workflow (maybe in other countries it is the opposite).
I want to give another reason, that is one of mine:
With money in my pocket, I have my expenses under better control. When the money is out before the month ends, I immediately see it.
With CC, it is not so.
And as we Germans are so economical, many of us like to have control over our expenses.
I also think, that there is a good evidence, that it actually works.
To see cash sitting at 65% simply doesn't align with my everyday experience. Maybe it's the legions of baby boomers in the suburbs? I don't know. I would've suggested Australia would've been 1/3 or 1/4 cash payment.
I'm a fan of the Indian demonetization experiment, and I believe it has yielded positive results, at least in terms of being able to use your credit/debit cards almost anywhere.
If such a drastic measure is taken, then there'll be some aversion to cash, which will, in turn, move more people to non-cash modes of payment.
In my experience, Germans have a strong debt aversion. Even the young did. My mom's friends would buy new cars by reaching into their purses and pulling out stacks of bills and counting them out in total. It never seemed anything other than weird to me.
"The slowest things to change are habits of thinking."
This caught me out at a McDonald's in Berlin that accepted neither Visa nor MasterCard earlier this decade. Even bigger brands adapt to local culture, it seems.
It's still a far cry from home (Australia) where I hadn't needed cash on hand in quite a long time, but it in terms of convenience it's not a big deal. it certainly beats France where cheques are still in extremely frequent use vs. wire transfers.
It sounds a bit crazy, but by law if a cheque bounces it was a criminal offence (I believe they recently changed it or were thinking about it).
There are a lot of interesting advantages to this, as you can effectively escrow cash without a third party. If you receive a cheque you know you can always (or should always) being able to cash it in.
Inserting your card, entering your pin, waiting a bit, getting some receipt printed, and finally signing it does take significantly longer than getting the right amount of change from a cashier who is used to doing this.
Paying with a debit card always makes you look a bit like a twat. It's similar to paying with a handful of coins.
You can get one that is indistinguishable from visa cc to the merchant and hence works everywhere normal Visa does (unlike the one branded "visa debit" that existed many years ago).
Personally I think cash is convenient. I also use debit card and credit card but somehow cash is the most convenient was of payment in a store.
Sure, with eShoping on an ever rise, this privacy increasingly vanishes.
With cash I know when I was robbed.
They pay some more than the half in cash.
It's in Italy where we almost pay everything in cash: in Italy 83% of payments are still in cash.
The reasons are obvious.
> On average, wallets in Germany hold nearly twice as much cash—about $123 worth
Not worth a mugging in a Western country that doesn't leave its citizens starving.
Also, stolen CC can be turned into cash.
Also, average monthly salary in Germany is $2666. Sounds WAY more profitable to be a pickpocket.
Probable reasons:
We don't have that much poor people here.
The few that are, get social aid from the public/country.
The few that aren't happy with the amount of money they get, can collect bottles, which give you 0,25€ per bottle. Few hours of bottle collecting in a big city is easy money on the side.
So most poor people here can make 10-20€ a day on the side legally.
Food is really cheap in Germany, so people don't have to carry around much money. Most of the time I only have below 50€ on me and only on bigger travels in the country-side I take more.
So I think there is simply no reason to risk getting caught stealing an amount of money you can easily make legally.
By the way, the big costs of daily life, like rent, insurance and the like are not settled using credit cards, cheques or cash, this stuff is all done by bank transfer and has been done by bank transfer since long before credit cards became somewhat established (for occasional use).
Second, the German banking system is actually very modern. While the Americans and British are still sending cheques through the post, Germans are regularly paying by direct debit and standing order, as a matter of course.
Third, I think a point that may be missing is that Germans might be suspicious of credit card payments as they leave records which can be inspected by government agencies. It's bad enough that they might be able to find out how much rent you pay and how much electricity you use, but they really don't need to know exactly which bar you got drunk in last night. I don't know if anyone's done any serious study into this one, but it is very noticeable that Germans are particularly concerned about their privacy.
Direct debit is extremely popular in Britain, and cheques have declined over 10% for several years in a row.
Graphs (PDF): http://www.paymentsuk.org.uk/sites/default/files/publication...
I'm from Germany, and I have to ask this... WHY?
Related anecdote: When I was still living with my parents, I had to cash in cheques from time to time for them. The cheques came from the lottery which they were playing, but they had no realistic possiblity at all to cash them in (the next branch of their bank was over an hour away by car), but I had an account at the local bank in the small town where I lived.