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Germany: Only Cash is Real

Categories : Cash ensures competition among payment instruments, Cash generates security, Cash is the most widely used payment instrument
May 3, 2023
While digital payments grew in Germany during the pandemic, cash still prevails in daily transactions. Burglars have targeted ATMs using explosives to access their safes in recent years.
Manuel A. Bautista-González

Ph.D. in U.S. History, Columbia University in the City of New York

Post-Doctoral Researcher in Global Correspondent Banking, 1870-2000 – Mexico and South America, University of Oxford

This post is also available in: Spanish

Cash is King in Germany

In Germany, 62% of point-of-sale transactions and 87% of person-to-person transactions are paid in cash; according to the European Central Bank, Germans withdraw an average of €6,600 yearly from ATMs. Cash usage has declined in the last decade, as it accounted for 77% of payments in 2019. However, a majority of Germans still prefer cash over digital payments:

Cash and the Covid-19 Pandemic

In 2019, the Bundesbank’s net issuance reached €60 billion; in 2020, it increased to nearly €70 billion (Deutsche Bundesbank Monthly Report October 2021: 69-70). The demand for banknotes peaked at €21 billion in March 2020, beginning the Covid-19 pandemic (see Graph 1).

Graph 1. Germany: Bundesbank’s Monthly Net Banknote Issuance, 2019-2021

Source: Deutsche Bundesbank (Monthly Report October 2021: 69).

Younger people had backup emergency cash to finance consumption. In a Bundesbank survey (Monthly Report October 2021: 69-70), 44% of participants said they held cash reserves, but holdings vary depending on age:

Nur Bares ist Wahres: Only Cash is Real

Several news items illustrate the dominance of cash in Germany.

Blowing-Up ATMs

Germany has 53,000 ATMs, reflecting the public’s preference for cash. Cases of data theft (skimming) at ATMs have been declining, from €34 million in 2011 to €1.06 million in 2020. But machine blow-ups are on the rise: in the last years, burglars have targeted ATMs, using explosives to access their safes and escape speeding to Autobahns.

Graph 1. Germany and North-Rhine Westphalia: ATM Thefts, 2018-2022

Source: German interior ministry, North-Rhine Westphalia police in Reuters (2023).

Die Welt reported the culprits are part of a “700-member network” of Dutch-Moroccan criminals. German police estimate Dutch ATMs raiders have carried out 70% to 80% of attacks in Germany.

Explosions have injured pedestrians and damaged homes, according to Oliver Huth, chairman of the state branch of the German Criminal Police Association (BDK) in North-Rhine Westphalia.

Many banks are closing cash machines to customers overnight and are reluctant to adopt blanket measures, advocating for a case-by-case approach. “Different locations come with different risks. There is currently no one-size-fits-all solution,” said a spokesperson for Deutsche Kreditwirtschaft, an industry group.

This post is also available in: Spanish