Germany – a cash country?

A summary from Dr. Erik Hermann, Head of Marketing at Deutsche Payment A1M SE


For a long time, “cash is king” in Germany, but in the Corona pandemic, many consumers have changed and adapted their payment behavior. Contactless payment methods have rapidly gained in importance. According to a representative survey by the Bundesbank, 30% of all payments (in-store, online, etc.) were made with a card in the first pandemic year 2020, while cash was used in 60% of the cases – in 2017, the share of cash payments amounted to 74%. In bricks-and-mortar retail, cash was used primarily for smaller amounts, more specifically 61% of transactions with a 38% share of sales.

While contactless card payments are becoming increasingly popular, mobile payments with smartphones are still far less prevalent. Only 13% of smartphone owners have used them for mobile payments. Many consumers felt that mobile payments were too insecure or complicated.

Researchers have also investigated the question of what motivates or discourages consumers to make mobile payments. The factors under investigation are diverse and range from perceived usefulness and ease of use, perceived costs, performance and effort expectations and trust to risk and security perceptions and the perceived similarity with online payment methods. The central influencing factors found by various studies are:

1. perceived ease of use, i.e., mobile payment should be free of any effort
2. perceived usefulness, i.e., mobile payment should create added value
3. perceived risk, i.e., mobile payment should not be associated with uncertainty
4. perceived security, i.e., mobile payment should be perceived as secure.

The potential of mobile payments is immense, as the proportion of smartphone users is generally over 80%.

Mobile payments are like all new technologies and innovations: there are the innovators and early adopters who are the very first and have been using mobile payments for a long time, and the majority who uses the technology sooner or later (early and late majority). Since consumers are oriented towards each other and influence each other (social influences and norms), it is only a matter of time before mobile payment will dominate the payment method mix.

If the above-mentioned factors are taken into account, there are promising and extensive opportunities to enable a positive payment experience for a very large number of consumers.

Go back