The Germans' obsession with cash

May 16, 2019 13:08
A survey conducted by the European Central Bank shows the average German wallet carries 103 physical euros, an amount far larger than that of any other EU member country. Photo: Bloomberg

Electronic payments are all the rage in China, India, and even Africa, but they are less popular in western developed countries.

According to a report on the Merchant Machine website last year, China is currently the global leader in mobile payments, with the country having a mobile wallet usage of 47 percent.

The United States only ranked seventh as mobile payment transactions in the country only stand at 17 percent.

But according to this report, the Germans are actually more averse to e-payments than the Americans in the developed world.

Germany isn’t even on the world’s top-10 list when it comes to mobile wallet usage.

The Germans appear to rely a lot more on cash to pay for goods and services in their everyday life.

According to a report released by the European Central Bank in 2017, the average German wallet carries 103 physical euros, an amount that is far larger than that of any other European Union member country.

So why do the Germans prefer cash for financial transactions?

Professor Dorothea Schäfer from the German Institute for Economic Research said this might have something to do with the Germans’ haunting memories of the two world wars.

According to Schäfer, a cashless society would remind the Germans of the numerical management adopted by the Nazis, and even the Holocaust that was committed based on sophisticated numerical calculations.

As such, in the eyes of many Germans, ridding them of cash is, in a certain way, taking away a part of their freedom.

If such a trend continues, Germany could eventually become the last remaining major industrial power that relies overwhelmingly on transactions with cash, which will have profound implications for the e-payment revolution in entire Europe.

This article appeared in the Hong Kong Economic Journal on May 9

Translation by Alan Lee

[Chinese version 中文版]

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Associate professor and director of Global Studies Programme, Faculty of Social Science, at the Chinese University of Hong Kong; Lead Writer (Global) at the Hong Kong Economic Journal