Some electronic payment systems at the cash register have been on strike for days. This makes the value of cash clear again. In Germany in particular, it remains more popular than all other means of payment. Even the corona crisis could not really change anything.

Since last week, some shops have had problems paying with plastic cards because the readers can no longer connect to the electronic payment systems. Behind it is an expired certificate, a kind of proof of authenticity without which no data flow is possible.

But no matter how small or big the problem, it is grist to the mills of those who reject plastic money and mobile payments and defend cash instead. What use are the most beautiful systems if they are much more error-prone than cash, is their question, to which they do not expect an answer.

Germany has been valued, ridiculed or decried as a cash country. However, there are now signs of changes in the choice of payment method in Germany, as shown by data from the Statista Global Consumer Survey. According to this, the proportion of those who pay in cash has fallen from 84 percent to 72 percent in the most recent evaluation.

Little has changed in plastic money in the last three years. On the other hand, there is a clear upward trend in mobile payments. 13 percent of respondents state that they use their smartphone to pay in restaurants or retail. The most used providers are PayPal, Google Pay and Apple Pay.

Nevertheless, cash is anything but a discontinued model. The fact that the amount of cash issued is constantly increasing speaks against this: according to the Deutsche Bundesbank, the number of banknotes in circulation has grown by an average of around six percent per year over the past ten years.

However, the total money supply has increased even more over the same period, resulting in a slight real decline in comparison. At the end of 2014, the limit of one trillion euros was exceeded, with over 1.4 trillion euros currently being spent.

Looking at the entire Eurosystem, the Bundesbank is by far the largest issuer of cash: in terms of value, more than half of all banknotes in circulation come from the vaults of the German central bank.

And it ends up in safes: the decisive factor behind the comparatively high demand for cash in Germany is that large parts of the cash issued are used as a store of value. Of the approximately 268 billion euros in cash that was in Germany in 2018 according to calculations by the Bundesbank, “an estimated 200 billion euros could be traced back to hoarding motives”, as the Bundesbank puts it objectively and thus describes the “high edge” phenomenon.

Private individuals keep an average of 1364 euros in cash in Germany. Apparently, as the Bundesbank notes, many appreciate being able to access cash at any time – even in emergencies or crises – or when other payment systems just don’t work.

“Cash is always a piece of freedom. Digital money, on the other hand, leaves digital traces. This is to be welcomed because it becomes more difficult to misuse it. On the other hand, the data protection of the citizens must also be preserved,” says Burkhard Balz, the Bundesbank board member responsible for payment systems, as another argument in favor of cash.

Banknotes and coins are the only form of money that people can store without the involvement of a third party. They needed no special equipment, no internet and no electricity.

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These arguments and technical glitches, like the current one, ensure that despite an increase in mobile payment systems during the corona crisis, Germans still prefer to pay with cash in an international comparison.

Only 38 percent would like to pay by card or mobile system when shopping, according to a survey of 9,000 consumers commissioned by the Swedish payment service provider Klarna. This puts the Germans far behind the international leaders Sweden (72 percent), Finland (70 percent) and Norway (67 percent).

Because of the pandemic, chain stores, restaurants and shops had increasingly offered card payments instead of cash to avoid contact with checkout workers and potential transmission.

The corona crisis could make the notes and coins unattractive more quickly, for example payment experts from the management consultancy Oliver Wyman then expected. But contrary to what was thought, fear of viruses on banknotes or coins has not supplanted Germans’ love of cash.

*The contribution “The drama about the card readers cements a German age-old concern” is published by WirtschaftsKurier. Contact the person responsible here.