Germans' love of cash is waning
Fewer Germans are paying for their purchases in cash. Instead, they are using cards or their smartphones at the cash register. Particularly popular among the younger generation is paying with their smartphone. The Bundesbank expects this trend to continue.
According to the latest study published by the Bundesbank on payment behavior in Germany, only 51 percent of all purchases were paid for with cash in 2023, down from 58 percent in 2021.
"This decline is no longer as pronounced as during the Corona pandemic," explained Bundesbank board member Burkhard Balz. "However, the cash payment share is declining faster than in previous years, when the decline only amounted to one percentage point per year." In 2020, the cash share was still at 60 percent. In 2017, it was 74 percent.
Germany, with a cash payment share of 51 percent, still ranks among the leading countries in Europe in this regard, alongside Austria and Italy, Balz said. In contrast, cash is already an outdated model in the Scandinavian countries: The share in Sweden is now only eight to nine percent. The country with the lowest cash quote in Europe, according to Balz, is Norway, with a minimum share of three percent.
Debit card is the second most commonly used payment method
Behind the declining use of cash is the trend towards paying with debit cards and the advance of mobile phone payments via apps. With a 27 percent share of all transactions, the debit card was the second most commonly used payment method in 2023, a significant increase of five percentage points compared to 2021.
Mobile phone payments via apps have also seen strong growth. The share of transactions increased threefold to six percent. "Mobile payment methods such as Apple Pay or the payment apps of banks and savings banks are particularly popular among younger interviewees," Balz said. Among 25- to 34-year-olds, the share rose from four to 14 percent.
According to the study, the preferences of the Germans have shifted towards cashless payment methods. Forty-four percent of those surveyed would prefer to pay cashlessly when given a free choice - three percentage points more than in 2021. "Younger and also affluent social groups prefer cashless payments," Balz said. Twenty-eight percent of Germans preferred cash when making purchases. "This is similar to the number in 2021," Balz added. Twenty-eight percent had no preferences.
5,700 people were surveyed
The popularity of mobile phone payments is continuing to grow. Of those who preferred cashless payments or had no preferences, 14 percent paid with their smartphone in 2023. This represented a doubling of their share compared to 2021. Balz expects that with the introduction of a digital Euro in the coming years, cash usage will likely continue to decline. "This will certainly also have an impact on cash usage quotas," Balz said.
Five thousand seven hundred people were surveyed for the study.
The Bundesbank estimates at the earliest the introduction of a digital version of the common currency in the Eurozone to be in 2028/2029. Balz is a member of the European Central Bank's Task Force for the digital Euro. Since 2008, the Bundesbank has regularly examined payment behavior in Germany. The latest study on payment behavior, the seventh one, involved 5700 people who were surveyed by the market research institute Forsa between September and the end of November 2023.
The Bundesbank predicts that the trend of fewer Germans using cash for purchases and opting for card or mobile payments will continue. In contrast, countries like Sweden and Norway have already seen a significant decrease in cash usage, with only eight to nine percent and three percent share respectively.
With a 27% share in 2023, debit cards followed by mobile phone payments via apps like Apple Pay and bank apps, are the second most commonly used payment methods in Germany, showing a significant increase from 2021.
