You have to read twice to make sure you understood the sign at the till correctly. But actually, it really says: “No cash payment”. In the branch of the Dean & David gastronomy chain at Munich Central Station, customers can only pay for their salads without cash. This is more hygienic, avoids long queues and protects the branch from robberies, the company argues.
This is still a rather unusual strategy. If a retailer or restaurateur in this country does not accept a payment method, then it is usually still a card payment. Nevertheless, Dean & David is not an isolated case: Some cafés, especially in larger cities such as Berlin, Hamburg or Munich have already banned coins and cash, as well the Meininger hotel chain or festivals like that Isle of Summer. What is indicated there is a revolution in installments. “I have the impression that companies with a young target group in particular are currently saying goodbye to cash, which they want to use to give themselves a cool look,” says Nils Beier, who deals with payment issues at the Accenture consulting firm. “But other companies are also noticing that cash is comparatively impractical.”
During the corona pandemic, retailers increasingly called on their customers to pay with contactless cards and thus cashless. It was quickly clear at the beginning of the crisis that coins and notes did not pose a major risk of infection. Nevertheless, many people apparently felt more comfortable not handling copper or paper: Lag the proportion of cash payments in 2017 it was still almost 75 percent, in the first year of the pandemic 2020 it had fallen to 60 percent – a crash, albeit at a high level in Germany, which is traditionally cash-loving. Suddenly there was even a card reader in the bakery branch.
If companies enable their customers to pay cashless, it costs money: depending on the card, up to 0.3 percent of the invoice amount goes to the card-issuing bank for each transaction. However: “Even cash is not free for retailers, because counting the money and taking it to the bank ties up staff,” says Beier. In rural areas in particular, it is sometimes 25 kilometers to the nearest branch, after all the financial institutions have closed thousands of branches in recent years. Since some ATMs have disappeared as a result, it is also becoming more difficult for consumers to get cash.
Some worry that they can no longer pay anonymously
In Scandinavian countries, this development has been apparent for a long time. In Copenhagen, Stockholm or Oslo, many cafés and bars no longer accept cash. For most people there, it goes without saying that they can pay for fruit at the market or for donations at church without cash. The advantage: In this way, payment flows are easier to trace – and criminals have a harder time. Occasionally, however, there is also resistance from innocent citizens. They worry that in some places they will no longer be able to use anonymous means of payment. The fear that at some point every purchase could be traced by avid data collectors is also what drives the supporters of cash in this country.
The good news for them is that neither a salad bar nor a festival can shake the fact that euro banknotes and euro coins are legal tender in Germany. “From a purely legal point of view, consumers are entitled to pay their bills in cash,” says Beier. “However, retailers or restaurateurs can avoid this if they clearly indicate on a sign at the entrance that they do not accept cash.” The Bundesbank also refers to this principle of freedom of contract.
For consumers, this can mean having to pull out the card if the worst comes to the worst or have to leave the store empty-handed. A survey by the Federal Association of Consumer Centers (VZBV) has shown that a good one in ten respondents has already been in this situation. “That’s not a good development,” criticizes Dorothea Mohn, who heads the financial market team at VZBV. She sees politics as having a responsibility to ensure that cash is still available and accepted in retail and catering.
In any case, most businesses would do well to give customers the freedom to choose how they pay. When thousands of retail payment terminals failed for days in May, it became apparent that Germany is apparently not prepared for everyday life without cash. At least not yet.