Germany is going cashless: debit cards are overtaking cash as the favorite!

Germany is going cashless: debit cards are overtaking cash as the favorite!

Payment methods in Germany are changing rapidly. A current survey by Visa shows that more and more people in Germany prefer to pay by smartphone or bank card. Very trendy is the debit card, which is the most popular payment method at 38 percent. While cash remains an option, its share of preferred payment methods is dwindling. 27 percent of respondents said cash was their first choice, while only 44 percent of people now carry cash with them, mainly as an emergency reserve if digital payments are not possible. Younger people in particular, especially Gen Z, tend to make their payments via smartphone. Here, 42 percent of people under 25 use their cell phone as their preferred means of payment, as nordkurier.de reports.

What are the reasons for this trend? The majority of those surveyed, an impressive 71 percent, expressed the desire to be able to pay cashless everywhere. Simple stores that only accept cash payments are at a disadvantage because 20 percent of consumers want to avoid these types of stores. Particularly among those under 35, 31 percent ignore such stores. The German Bundesbank also confirms this development. According to a study, the share of cash payments in Germany fell from 58 percent in 2021 to 51 percent this year - a decline that shows the world of finance is picking up speed.

Mobile payment on the rise

Another highlight is the rapidly increasing use of mobile payments. The share of these payments has tripled compared to 2021 and now accounts for 6 percent of all transactions. The trend is clear: 23 percent of those surveyed now prefer to pay via smartphone, an increase of five percent compared to the previous year. In 2020, this value was a meager 12 percent. There is a notable change here too: 32 percent of people occasionally use their smartphone for payments, while 97 percent of survey participants own at least one debit card. This shows that cashless payments are very popular, despite the ongoing skepticism towards real-time transfers. 56 percent of those surveyed are concerned that the money cannot be refunded, and 20 percent avoid this form of payment entirely.

Cash: past or future?

The future of cash payments is uncertain. While 44 percent of those surveyed would like to continue to rely on cash in the future, 50 percent are convinced that cash will almost disappear in 15 years. A significant increase from 6 to 15 percent shows how difficult access to cash is now perceived. This perception means that 80 percent of retail payments could theoretically have been processed cashless - evidence of the existing cash fatigue. Access to cash is perceived as increasingly difficult, highlighting the discrepancy between desire and reality; 94 percent of transactions in 2023 were possible without using cash.

German payment behavior is changing. Acceptance of cashless options is increasing while cash is on the decline. The proportion of those who rely on cash payments is decreasing, and a clear majority want the flexibility to operate in the digital payment world. The Deutsche Bundesbank is aware of this challenge and is working to anchor cash as a cost-effective means of payment in society and to make it future-proof in order to give people a choice.

The results of this survey and studies are not only a reflection of current consumer behavior, but also an exciting look into the future of payment in Germany. The changes are clearly noticeable and it remains to be seen how the market and consumers will react to this transformation. Everyday finances will continue to evolve, and it is important to keep up with the times. After all, they say that if you don't move with the times, you move with the times.