September 17, 2020

Card to overtake cash in Germany in historic first

By Lucy Ingham

The number of payments made by card are expected to exceed those made using cash in Germany for the first time in history this year.

This is according to Euromonitor International, which today published a white paper entitled The German Consumer: Rapid Evolution Amidst the Crisis projecting that in 2020 card would outstrip cash for payments in the country.

It also projects that between 2019 and 2015, the total transaction value of card payments will rise by 28%, while those with cash will fall by 34%.

The most notable driver of this trend is – not surprisingly – the coronavirus pandemic and its associated lockdown, which has seen consumers not only move towards ecommerce, but also shun cash over fears that it could spread the virus.

“As a response to the COVID-19 pandemic, German consumers showed an abrupt shift in payment behaviours, increasingly using card payments over physical cash for hygiene reasons,” said Ratna Sita, head of DACH research at Euromonitor International.

“A growing number of them also started to use the contactless card function and smartphones for mobile payments for the first time.”

Cash vs card in Germany: Overcoming privacy fears

While card use overtaking cash in Germany is a novel idea, in other countries this bridge was crossed some time ago.

In the UK, for example, card use overtook cash in 2018, and 7.4 million people – approximately 11% of the population – are now living “almost cashless”.

However, Germany has traditionally remained more favourable towards cash, with concerns over privacy muting the growth of card use.

But according to the white paper, this is now waning, particularly given a strong focus on security from card operators and the rise of what Euromonitor calls the “New Gen German consumers” who are less wary of technology.

As a result, while this shift to card was beginning to start in Germany, Covid-19 has hastened the move away from cash.

“Covid-19 accelerated change in consumers’ behaviour towards payments,” said Sita.

“In the future, the average German consumer will be older, technologically savvy and more open to new experiences, a shift from a more conservative behaviour in the past.”

Read more: Digital money transfers get Covid-19 boost as consumers shun cash


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