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Mastercard: Young East Germans are driving the "digital payment turnaround"

A new study by payment service provider Mastercard sees cashless payments gaining ground in the east and south of Germany. The Bundesbank has analyzed this similarly.

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Man sieht eine Person, die die Bankkarte an dem Kartenlesegerät hält
Almost half of Germans now pay for their purchases by card, mobile or online. Nevertheless, the Bundesbank assures that cash will be preserved. Source: PR/Sum-Up

Ulrich Wolf

Dresden/Frankfurt on the Main. Young people in eastern Germany are increasingly saying goodbye to paying with cash. This is shown by the representative study "Paying without borders?", which was commissioned by the financial services providers Mastercard from the USA and Sum-Up from the UK.

Consumers in the east and south of Germany, in younger age groups and in cities are particularly keen on cashless payments. From Greifswald to Zittau, almost every second consumer (47 percent) would prefer to always pay by card, it said. This figure is similarly high in southern Germany, while the north and west are in some cases significantly lower.

According to the study, 37 percent of those surveyed in the east and south also stated that they would be annoyed if they were unable to make cashless payments. Among city dwellers, the figure is as high as 48 percent nationwide. Among 25 to 34-year-olds, the figure is 47 percent, and among 35 to 44-year-olds it is 50 percent. In comparison, the figure for 55 to 65-year-olds is only 31%.

The Bundesbank assures us: Even if less and less is paid in cash, "it is and will remain our physical core product".
Source: dpa-Zentralbild

The main reason given by 79% of respondents for paying by card or digitally was convenience. According to Mastercard, companies that refuse to use digital payment methods risk "significant sales potential", particularly among urban and younger consumers. Peter Robejsek, Managing Director of Mastercard Germany, says: "In a world where expectations of convenience and flexibility are constantly rising, we need to offer more cashless payment options."

However, payment service providers such as Mastercard also charge merchants: For each use according to the Cologne-based BE Bezahlexperten GmbH A transaction fee is charged, starting at seven cents. Additional costs are also incurred: around 0.9 percent of the payment amount for debit cards and around 1.2 percent for credit cards. Merchants also pay a terminal rental fee and a monthly service fee.

For the Mastercard Sum-Up study the responses from two representative online surveys of over 1,000 consumers and over 500 decision-makers in companies in Germany were analyzed and compared.

Another study by the Bundesbank from this summer concludes that cash will still be the most commonly used payment method at the checkout in 2023 at least. However, card and mobile payments would increase significantly, while the proportion of cash payments would fall.

Bundesbank board member Burkhard Balz emphasizes that the proportion of cash payments has fallen from 58% to 51% compared to the 2021 survey. According to Corona, citizens have "only partially returned to their previous payment habits". In terms of turnover, debit cards were clearly in first place with a 32% share of total spending, followed by cash in second place with 26%, ahead of bank transfers and online payment methods such as Paypal, Klarna or Giropay.

Balz countered fears that cash would be completely abolished sooner or later. The Bundesbank wants to keep cash available as a cost-effective means of payment, assures Balz. "Cash is and will remain our physical core product."

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