D.he corona pandemic has pushed back the use of cash in Germany about as much as it usually happens in seven to ten years. The value transport industry is responding to this by reducing the number of cash transporters and employees. In trade, more than 70 billion euros less cash was used in the past year than in the previous year due to the increased card payments, said Harald Olschok, the chief executive of the Federal Association of German Money and Valuables Services, the FAZ , from 600 to 450 million euros. The transport companies have reduced the number of cash transporters by around 6 percent to 2280, and almost 300 jobs have been cut in this context.
Normally, the share of cash in trading falls slowly but steadily by around one percentage point a year. With the pandemic, this has accelerated significantly to less than 40 percent of the volume of payments in retail. It is expected that the volume of payment transactions in retail will rise again after the lockdown – but the share of cash payments will probably not return to the old level.
In the pandemic, less cash is used in retail, but the demand for cash for hoarding has risen sharply. Only once did the transport companies earn money from it, if the money then stayed with the recipient. “In February and March of last year, the demand for cash went up dramatically,” said Olschok. “Our money transporters drove day and night.” The currency in circulation in the euro area rose by 11 percent over the year to 1.1434 trillion euros – that was the strongest increase since the introduction of the euro. But the money is no longer moved as much.
Fewer ATMs, fewer bank branches
The ATMs working group, in which independent machine operators are united, dismantled up to 10 percent of their machines in the wake of the pandemic. At the banks and savings banks, which do not have to live from the machines, the development is slower. In the banking industry, however, it is noticeable that the crisis is being used to reduce the branch network. The association estimates that there will only be 15,000 bank branches in Germany in 2025 – not even half of the previous years. The Bundesbank is also reducing the number of its branches in the wake of the lower use of cash, most recently in North Rhine-Westphalia by setting up a “super branch”.
Some money and value services have discovered a new business model through the negative interest rates of the European Central Bank. “There are credit companies that store billions in cash with our companies,” said Olschok. This avoids having to pay negative interest yourself. A few years ago, Munich Re publicly speculated about such plans.
Olschok once again promoted cash, its anonymity and the possibility that everyone had access to it. The association supports a new initiative “Cash counts!” And advocates establishing a kind of right to cash payments in law. He rejects stricter upper limits for cash payments. “Undeclared work, prostitution, corruption – everything is always attributed to cash,” said Olschok. In his view, the case of the online payment service provider Wirecard, for example, shows that there are other ways than cash to burn money.
Olschok even sees the discontinuation of the 500 euro note by the ECB some time ago, otherwise often sharply criticized by cash fans, as an advantage for his industry. After all, the smaller banknotes now take on the role of the larger ones: “If someone wants to store 10,000 euros in their safe, from our point of view a larger volume of cash will be transported than before.”
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