Germans have a great passion that surprises those who arrive in the country: paying in cash. Europe’s largest economy is reluctant to embrace the global trend of saying goodbye to coins and banknotes. Far from a romanticism for times past, this persistence is in line with the deep desire felt by a large part of German society to ensure their privacy at all costs. No one should know what they do with their money, much less the banks.
In a European Central Bank survey, 69% of Germans said that cash was “important” or “very important” to them. Especially older people and people with low income and level of education showed great attachment to this form of payment. Only in Austria does the love for banknotes and coins seem to be even greater.
Going out for a drink in Germany may involve going through an ATM first. The “Only cash” sign hangs at the entrance of many establishments, especially in some parts of cities such as Berlin, but also in other areas such as the wealthy state of Bavaria. “My boss has been charging only in cash for 37 years and thinks why change now,” explains the waitress at the popular Franken Bar, in the Berlin neighborhood of Kreuzberg, where the sign is up to three different places to avoid problems with tourists. Along with the justification of the custom, many other establishments argue that it is due to the high cost of accepting cards. “To be honest, we don’t accept cards because the taxes on the cards are too high for us,” explains the waiter at an Asian restaurant in the Neukölln neighborhood, in the south of Berlin.
“We tried it for three months during the pandemic, but we paid 800 euros to accept card payment. Supermarkets receive a special discount because they are large establishments, not like us,” he indicates about the commissions that banks charge per transaction and that varies depending on the type of card. In the case of Visa, for example, it can range from 1% to even 3%. Added to this is the monthly rental of the terminals. Cash payment is not limited to the hospitality sector, but is also seen in other services in the German capital such as the car workshop, despite the high amounts. “I need cash to be able to pay everyone who supplies me with parts for the workshop and who only accept bills,” the mechanic of a workshop simply answers when asked about his reasons.
Tax debate
This makes conversations about privacy or high taxes intermingle with the shadow of black money, the famous box B that some businesses have to evade taxes and with which citizens are willing to live if it allows them to continue paying with banknotes. The tax authorities, who have been pushing for years to establish maximum cash limits, see it differently. Experts think that large amounts of cash are primarily an indication of suspicious transactions.
“We often find lockers full of money,” explains Oliver Huth, president of the Association of Crime Investigators of North Rhine-Westphalia, to the German publication. Der Spiegel. “The money comes from every crime imaginable: drug crimes, extortion or money laundering,” she adds.
According to estimates, the average German still has around 100 euros in his wallet, but the proportion of cash payments is gradually decreasing and more and more Germans are paying for products electronically. Last year, Germans used their bank card or smartphone an average of 284 times to make purchases, according to calculations by the Boston Consulting Group (BCG). This represents an increase of almost 5% compared to the previous year. However, Germany is at the bottom of the table compared to the rest of European countries. “For Germans, cash remains an important means of payment,” says Markus Ampenberger, payment operations expert and co-author of the study.
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