Payment behaviour in Germany in 2021

Cash remains most frequently used means of payment in Germany

Cash continues to be the most frequently used means of payment in Germany, although cashless payments are increasing their share. These are the findings of the Bundesbank’s sixth study on payment behaviour in Germany for 2021. Respondents used banknotes and coins to make a total of 58% of their payments for purchases of goods and services, compared with 74% in the Bundesbank’s last major study from 2017. The lower use of cash was mainly due to the increase in online purchases during the coronavirus pandemic. “Neither digitalisation nor the pandemic have been able to oust cash. When it comes to making payments, cash is still by far the most popular means in Germany,” explained Johannes Beermann, the Bundesbank’s Executive Board member responsible for overseeing cash management.

Even if cash use declined as the pandemic wore on, many respondents regarded it as a reliable means of payment that protects their privacy and gives them a good overview of their spending. The share of cash payments measured in terms of turnover still amounted to 30%. Individuals carried around €100 in their wallets on average, almost as much as they did four years ago (€103). The vast majority of respondents (69%) said they intend to continue paying in cash in the future as hitherto.

Rise in use of cards and e-payment methods

Four out of ten respondents expressed a preference for card payments or other cashless means of payment, which was reflected in their actual use. Of all the payments recorded at the point of sale, for recreation activities, in online commerce and in other payment situations, 29% were made using a card. In terms of turnover, the share came to 40%.

Debit cards (primarily the girocard in Germany) were the second most frequently used means of payment, accounting for 23% of the number of transactions and 30% of turnover. During the coronavirus pandemic, people increasingly used debit cards to settle smaller payment amounts. Credit cards also gained in significance, accounting for 6% of transactions. It was mainly large amounts that were settled using credit cards. This aspect and the increased use of credit cards in online commerce led to credit cards accounting for 10% of turnover, twice the level recorded back in 2017.

The trend towards online commerce persisted in the second year of the COVID-19 pandemic. The share of total turnover attributable to online commerce rose from 6% in 2017 to its current level of 24%. This coincided with a change in spending behaviour: 5% of all transactions were settled using e-payment methods, and their share of turnover doubled to 8% compared with 2017. Looking at online commerce purchases in isolation, just under half of all such transactions were settled using e-payment methods, while their share of turnover came to 33%.

Alongside the shift in purchases to the internet, mobile payments using smartphones and wearables such as smartwatches and fitness armbands continued to gain ground: 17% of surveyed smartphone owners already used their smartphone to pay at the point of sale, while 27% of those who owned smartwatches or fitness armbands with a payment function used their device for this purpose. Smartphones and wearables thus increasingly emerged as a payment option, but are not yet widely used by the public. “I am expecting to see an increasing number of people in Germany trade in their physical wallets for an electronic one,” said Burkhard Balz, the Bundesbank’s Executive Board member responsible for payments and settlement systems, summing up current developments. In that vein, the study shows that 34% of respondents were already using apps as a convenient way of sending and receiving money.

Background of the study

The Bundesbank has been regularly conducting detailed studies on the use of payment instruments since back in 2008. Data were collected on the Bundesbank’s behalf by the market research institute forsa, which contacted a total of 5,870 randomly selected citizens aged 18 and over by telephone between September and December 2021. Respondents were also asked to keep a diary of their payment habits for three days. This diary was to include actively initiated one-off payments, such as cash payments when shopping at the supermarket or credit card payments at a restaurant. Recurring payments such as rent, insurance contributions and electricity and gas bills were not included, as these are usually always paid by direct debit.