Germany to mandate digital payment options in retail and hospitality from 2027

New rules for point-of-sale transactions

German businesses in retail, hospitality, and the service sector will be required to provide at least one digital payment option alongside cash starting in 2027. Under key points prepared by Finance Minister Lars Klingbeil, commercial vendors must accept electronic payments wherever customers pay for goods or services directly on site. The measure eliminates compulsory cash-only policies across stores, restaurants, kiosks, and hairdressers, giving shoppers the choice to pay via card, smartphone, or smartwatch for transactions of any size.

The key points document from the ministry sets out the central objective for commercial transactions:

We want companies to offer a digital payment option wherever goods and services are paid for directly on site.

Technical requirements and sector exemptions

Under the proposed framework, business owners retain the freedom to select which digital payment system to install, provided it includes at least one European payment method. Vendors will not be permitted to set minimum purchase thresholds, such as requiring a minimum spend of ten euros for card usage, nor can they levy additional surcharges on customers who choose cashless methods. Cash will retain its status as legal tender throughout the country, ensuring that physical euro banknotes and coins remain accepted at every commercial checkout.

The regulation applies exclusively to commercial businesses. Non-commercial entities, including amateur sports clubs, charitable associations, and operators at flea markets or village festivals, will remain exempt and can continue operating on a cash-only basis. The Finance Ministry is also reviewing whether specific hardship regulations should be established for particular commercial cases.

Market shifts and business costs

Data from the Bundesbank shows that cashless transactions accounted for 55% of all daily purchases in Germany during 2025, compared to 45% for cash. Debit cards, primarily the Girocard system, represented 26% of transactions, while mobile payments via smartphone or smartwatch grew to 10%. Cash usage remains most prevalent among older citizens, individuals on lower incomes, and those with limited digital access or health restrictions.

The initiative has raised operational questions among small traders and business operators. Bundesbank figures for 2025 indicated that processing a Girocard payment cost merchants an average of roughly €0.60 per transaction, or nearly 1% of turnover, with international debit and credit cards incurring higher fees. Merchant concerns focus on equipment leasing, terminal maintenance, software upgrades, and fixed network fees that must be factored into consumer retail prices.

Legislative timeline and enforcement aims

The proposal delivers on a policy commitment established in the coalition agreement between the Union parties (CDU/CSU) and the SPD. The Finance Ministry is currently coordinating the key points with other federal departments, with plans to introduce a formal draft bill into the federal cabinet before the end of 2026.

Beyond consumer convenience, the ministry frames the requirement as a mechanism to curb financial crime. Because electronic payments generate automated records, the ministry argues that mandatory digital payment options will strengthen oversight against tax evasion and money laundering across cash-heavy consumer sectors.