• Slowly, Germans look beyond cash to shop


    BERLIN: Tourists and business travellers visiting Germany are often surprised when they reach to pay for their beer, metro tickets or even a large restaurant bill that their credit cards are not welcome.

    Habits, however, are slowly changing in Europe’s top economy, as younger consumers leapfrog from cash to convenient electronic forms of payment.

    A deeply ingrained mistrust of credit has long kept cash king in Germany, where the average citizen carries 103 euros ($113) in their pocket.

    “Cards have long been the most costly means of payment for merchants while cash transactions cost them almost nothing,” Ulrich Binneboessel of the HDE retail sector federation told Agence France-Presse, explaining the reluctance to accept credit cards.

    More than half of the amount spent in Germany on private purchases, 53 percent, is paid in cash, according to a study by the Bundesbank central bank—one of the highest rates for an advanced economy.

    In terms of the number of transactions, the figure hovers at 79 percent despite the fact that nearly all Germans have debit cards, which are much more widely accepted by vendors.

    A third of those polled said they only paid in cash, far more than in other Western countries, with the rate particularly high among pensioners.

    One among them, who asked to be identified only as Reinhard, always carries money and knows exactly how much he has on him at any point in time.

    “In a shop, I think it’s a waste of time to pay any other way but with cash,” he said.

    Reinhard, who lives in the western state of Hesse, said he is afraid he will be charged too much and discover it only when he receives the bill in the mail, and is wary of hackers and identity thieves who prey on cardholders.

    Historical trauma
    Security and privacy are high priorities among Germans, who tend to be more conservative consumers with a strong aversion to debt. The vestigial trauma from 1920s-era hyperinflation which helped usher in the Nazi era still colors the national thinking.

    “Consumers in Germany have little desire to experiment,” said Carl-Ludwig Thiele, a Bundesbank board member.

    But “changes in how people pay are coming, step-by-step.”

    In a revolutionary move by German standards, discount retailers Lidl and Aldi started accepting Visa and MasterCard this month, after electronics chains Media Markt and Saturn took the same decision in late May.

    And from the autumn, Media Markt and Saturn customers will be able to check
    themselves out at the till by scanning their cards or mobile phones. “It is no longer relevant to talk today of Germany as a country of cash payers. Perhaps the Germans just need a little longer than others to be convinced of the benefits of the new payment systems,” said Horst Rueter of research institute EHI in the western city of Cologne.



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