Germany maintains its position as the country with the highest share of cash payments in Europe, according to the latest report from the country's central bank. While cards and mobile payments dominate in other developed nations, over half of consumer transactions in Germany still occur using banknotes and coins. This distinct preference results from habits, privacy concerns, and the strong entrenchment of cash in German economic culture. Experts note that this trend persists despite advancing digitalization and the growing popularity of cashless payment methods among younger generations.
Cash Dominance in Transactions
According to Bundesbank data, the share of cash in consumer transactions in Germany exceeds 50%, representing the highest rate among developed European economies. This dominance persists for both small and medium purchases, although cards are increasingly used for larger amounts.
Cultural and Social Determinants
The strong attachment to cash in Germany results from a combination of factors: fear of losing privacy with digital payments, a sense of better control over expenses, and a deeply ingrained custom. The older generation in particular views banknotes and coins as the only "real" form of money.
Contrast with the Rest of Europe
The situation in Germany strongly contrasts with countries like Sweden, the Netherlands, or the United Kingdom, where cashless payments are almost universal. In Scandinavia, the share of cash has fallen to around ten percent, and many retail outlets have completely stopped accepting it.
Challenges for Monetary Policy
The preference for cash poses specific challenges for the Bundesbank and European regulators. On one hand, they must ensure the availability of physical money, and on the other – support innovations in the area of digital payment methods to avoid hindering economic development.
Germany continues to maintain its status as Europe's bastion of cash payments. The latest data, published by the Bundesbank and widely commented on by leading German media, confirms that over half of all consumer transactions in the country still take place using banknotes and coins. This statistic places the Federal Republic at the very top among the continent's developed economies, clearly distinguishing it from trends observed in Scandinavia or Western Europe. Since the introduction of the first banknotes in Europe in the 17th century by Stockholms Banco, cash was the undisputed means of payment for centuries. The revolution of credit cards in the mid-20th century and the subsequent development of electronic banking gradually diminished its importance, yet in some societies, like the German one, physical money has retained an exceptionally strong cultural and practical position. This preference has multidimensional roots. Firstly, it stems from a deep attachment to anonymity and privacy in the financial sphere. In Germany, a country with painful historical experiences of surveillance, there is a widespread fear of the full traceability of expenses offered by digital systems. Secondly, cash is perceived as a tool providing better control over the household budget – physically handing over banknotes has a more tangible psychological impact than tapping a card. Thirdly, infrastructure remains significant: a dense network of ATMs and the universal acceptance of cash at all retail and service points reinforce this model. „Bargeld ist für viele Deutsche nicht nur ein Zahlungsmittel, sondern auch ein Teil der Sparkultur und der persönlichen Freiheit. Es ist etwas Greifbares, das ein Gefühl der Sicherheit in einer unsicheren, digitalen Welt gibt.” — German economist quoted by media Nevertheless, the trend is not uniform across society. Younger generations, particularly residents of large metropolises like Berlin or Munich, are increasingly willing to use debit cards, mobile applications, or contactless systems. The popularity of fintech services and digital wallets is also growing. However, the pace of this change is noticeably slower than in neighboring countries. Experts indicate that a full transition to a cashless economy in Germany, if it occurs at all, will be a long-term process, spread over decades, not years. The Bundesbank emphasizes that its duty is to ensure citizens' freedom of choice – therefore, cash is to remain a widely available and accepted means of payment, alongside the developed modern alternatives.