Why do people prefer cash

The Bundesbank has found out that people in Germany carry an average of 103 euros in their wallets. Why, some ask. After all, it has long been the practice in other countries to pay for many everyday transactions with cards or smartphones. At the counter, too, it would be quicker without cash. But many Germans are cautious when it comes to their own money. According to the Bundesbank, consumers in Germany pay 79 percent of their transactions in cash. Consumers continue to pull out their wallets, especially for small, everyday purchases.

The advantages

Those who only spend their available money in cash have the feeling that they have a better grip on their expenses. In a survey by the Yougov research institute, three out of four respondents said that they could keep track of their own finances better with cash. In addition, cash payers set themselves a psychological limit: If their wallet is empty, the inhibition threshold for further purchases increases.

In addition, 72 percent of those surveyed in the Yougov study said they generally considered cash to be more secure than card payments. This year, significantly fewer criminals have manipulated the technology in order to spy out card data and secret numbers of the payers; the point-of-sale terminals in shops and stores have become more secure.

Nevertheless, the customer also leaves data with every electronic payment. In the case of joint account management, for example, the spouse can read on the account statement how expensive each other's gift was to purchase. And with payment apps, there is a risk that the operators could analyze the customer's purchasing behavior and account movements.

In contrast, cash payments protect privacy, says Bundesbank board member Carl-Ludwig Thiele: "The fact that less righteous people also benefit from this is no reason to let honest citizens become more and more transparent."

By the way, cash enables many spontaneous good deeds. The donation box in the pedestrian zone would be just as empty as the collection box in the church without coins and bills in your wallet. The first places of worship have already introduced the "electronic bell bag".

The disadvantages

Cash costs money - and not just because the notes have to be printed and the coins minted. Banks and shops have to pay vaults and safes so that there is always enough cash on hand. Some economists criticize that the cost of one- and two-cent pieces in particular is higher than the economic benefit of copper coins. But the German trade association says that the price competition for goods such as milk or eggs is so tough that retailers can hardly do without prices that are accurate to the cent.

Because the state authorities are barely able to control cash payments, they also miss out on tax revenues: Without cash, there would be significantly less undeclared work, money laundering and other businesses that should be removed from public control. Abolishing cash would combat drug trafficking - and bring in hundreds of millions of euros a year for the state, proponents of this measure estimate. Raids on banks and shops would also be contained.

In addition, economists point out that cash limits monetary policy's ability to act. For example, the central banks are practically unable to introduce negative interest rates for savers, because in case of doubt they could withdraw the money from their bank account and hold it in cash.

The alternatives

In many countries, payment has changed more than in Germany. Not just because of other habits, but because there are customer-friendly offers there. According to the official Payments Council, there are more transactions without cash in the UK than with cash. In many British shops it is a matter of course that customers pay amounts up to 25 euros easily and quickly by card - without a secret number or signature, practically in passing.

In contrast to Germany, small shops, restaurants and petrol stations in Denmark will no longer have to accept cash from next year. Payment by smartphone is particularly widespread there. Denmark's largest financial institution, Danske Bank, has established a system for mobile payment. More than every third Dane uses this offer.

The German banks only launched their own alternative to the market leader PayPal this year. The mobile payment service Yapital, on the other hand, ceases operations in January: the demand for the digital wallet was too small.

© SZ from December 31, 2015 / dpa / ikt