Cash: the safe payment method you can count on in a crisis – for individuals AND enterprises
Debit cards, credit cards, mobile phones, electronic payment services… the volume of electronic payments has been rising sharply over the last few years, in Germany and everywhere else in Europe. Businesses and restaurants insist on digital payments. ATMs and bank branches are disappearing. In some places, it’s hard to get hold of cash at all. Despite this, reports Dorothea Mohn, head of the Finance Market team at the Federation of German Consumer Organisations, around 90 percent of consumers would like to have the option to keep paying cash. Like many other people, she believes that cash still is and will remain an important payment method.
Burkhard Balz, Member of the Executive Board of the German Federal Bank, shares her view. He sees cash as an important component of the financial landscape. Although acknowledging that the number of ATMs and bank branches in Germany has reduced considerably, he is confident that cash will continue to be used throughout the country for at least the next ten to fifteen years, and says that Germany’s stance on cash remains strong by comparison with Europe as a whole. At the same time, the German Federal Bank has been advocating for the introduction of the digital euro and for partnerships to help ensure cash remains available (ATMs).
Advantages of cash
- 7.5 % of the population are dependent on cash (often older people, those on low incomes, or the technologically illiterate).
- Democratic payment method with no barriers to access (account, credit rating, etc.).
- A foundation for financial and social participation; guarantees personal freedom, independence, and privacy.
- Cash doesn’t crash: works during power cuts, blackouts, technical malfunctions, natural catastrophes, and cyberattacks.
- Resilient in crisis situations, and included on emergency lists the world over.
- Preserves privacy and anonymity.
- Available just about anywhere, for payment with no use of intermediaries.
- Keeps fees for the use of other payment methods affordable and payment providers competitive.
Why is cash so important for businesses?
Cash and cash payments are also important for businesses. Cash creates leeway for entrepreneurial freedom, it provides a safe anchor, and it also protects against financial loss and damage to reputation:
- Transaction fees: card payments cost up to 3.4 % per transaction.
- Brake on liquidity: card payments are not received until later.
- Customer annoyance: many customers still prefer to pay with cash.
- Cybersecurity and consumer privacy rights: growing risks of cyberattacks and data leaks.
Sweden and Norway are returning to cash
The Scandinavian countries have long been leading the way on electronic payment methods. People pull out a mobile phone or card to pay for everything from a cup of coffee or a train ticket to their weekly grocery shop. Even back in 2023, surveys indicated that 90 % of Swedes used card or app payments – in fact, there’s no other European country with as little cash in circulation as Sweden or Norway.
However, these steps towards an entirely cashless future don’t come without their own risks, and the Scandinavian governments have realised this and are taking steps to reverse the trend. For one thing, electronic payments make a country into an attractive target for cyberattacks; for another, people no longer recognise the value of cash. That means that if a crisis occurs and there’s a need to revert to cash, it might well not be accepted or not considered legitimate.
These are serious issues and have led Sweden and Norway to start encouraging people to start using more cash again, to accept cash as a payment method, and to have cash stocks set aside in case of a crisis.
The “Cash counts!” campaign
Founded in spring 2024, the German “Cash counts!” campaign believes strongly that cash must remain an important part of our economy. Members of the campaign include businesses and organisations as well as other groups and private individuals.
Anton Debatin GmbH is a founder member of the Federal Association, and former CEO Thomas Rose one of the three members of the Executive Board. His commitment to the cause can be summed up in one line: “Cash is a pillar of democracy and essential to social participation”.
