People who pay in cash are sometimes looked at from an angle

W.he was surprised by the strong resistance to paying with the smartphone, says Bundesbank board member Burkhard Balz: “I would not have expected that.” One of the findings of many: The Bundesbank now has more than 5000 people in Germany in a complex process Have a so-called payment diary filled out for one to three days. In it, they should record exactly what they bought and how they paid for it. They were also pestered online and by phone with questions about their settings for payment. Between August and October 2020, in the middle of the Corona crisis, but not in lockdown. The Bundesbank then compared all of this with a similar survey three years ago.

At first it became apparent what one would have expected: The Corona crisis gave cashless payment a powerful boost. Of all recorded payments at the checkout, during leisure time, in online trading and for other payment occasions, 30 percent were made with a card. In the same definition, it was only 21 percent three years ago. At the same time, the share of cash payments fell from 74 to 60 percent. In other delimitations, the share of card payments in payment transactions is even significantly higher. “A year ago you couldn’t pay by card at our bakery,” recalls Balz. “Nowadays you get a strange look there if you add up coins to pay for your rolls.”

The Bundesbank reports that card payments received a particular boost in the crisis because they offer the option of contactless payment. After all, 21 percent of contactless payment users stated that they only started using it in the corona pandemic. Many people also said that they now plan their purchases more carefully than before – and buy more at once.

In any case, during the Corona crisis, a significant part of shopping has been shifted entirely to the Internet. 15 percent of those surveyed said they now shop online at least once a week, 33 percent once a month. In terms of amounts, credit cards (37 percent) dominated the forms of payment there, ahead of Internet payment methods such as PayPal (33 percent) and transfers and direct debits (27 percent). New customers in particular who only really discovered online shopping during the crisis were more likely to use credit cards to pay; Internet-savvy people, on the other hand, tend to use the various special Internet payment methods.

“We do not expect this development to reverse again after the Corona crisis,” said Balz. If people got used to the convenience of card payments, they should stick with it. Especially since many in the survey stated that they not only pay by card for hygienic reasons because of the pandemic, but also because it is more practical and faster.

This time no consequence of the “War on Cash”

No “war on cash”, no war by banks and credit card companies against cash has been successful in pushing back notes and coins in payment transactions – but rather practical considerations, combined with the diverse peculiarities of business life in a pandemic. At the same time, there is still strong demand for cash as a store of value.

With regard to paying with the smartphone, many people in the survey expressed themselves rather skeptical – similar to the possibility of having their checking account with one of the “big tech” groups such as Amazon, Apple, Facebook or Google in the future. However, this applies more to the elderly than to the young. At least 13 percent said they had already paid with their smartphone. Of the others, 70 percent said they had “no need” for it, 47 percent expressed safety concerns. However, Balz recalled that in the 1980s many would probably have also said that they did not need a cell phone without this having stopped the triumphant advance of mobile communications.

The proportion of people who have ever come into contact with Bitcoin in practice was also quite low. 3 percent said they had bought crypto tokens before, and another 3 percent said they were considering it. 80 percent said they couldn’t imagine it.

The Bundesbank painted the image of a society that, despite all its attachment to cash, is increasingly moving towards electronic payment – the Corona crisis is only taking on the role of an accelerator.

You have to keep all of this in mind when planning the future of a digital euro. “I share the assessment of ECB President Christine Lagarde that five years is a realistic period until when we will have the digital euro,” said Bundesbank board member Balz. Balz reported that he was a member of a “High Level Taskforce” of the European central banks on this topic, which would like to make its recommendation on how to proceed by the middle of the year: “However, I also share the assessment of Bundesbank President Jens Weidmann that security and When it comes to this issue, care should be taken over speed. “


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